Things to Avoid While Purchasing a New Home

Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the lender approves their loan. Until the house is really yours, there are still some hurdles to jump. Here are some things to stay clear of before closing to assure your transaction goes smoothly.

Don't buy luxury items. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but stay away from expensive purchases like furniture, jewelry, appliances, or vacations until the loan closes. You may send up red flags with your lender if you buy new appliances on your credit cards during your loan process. Using cash to purchase big items can even be an issue: many lending institutions look at your cash reserve when approving your loan.

Don't look for a new career. Stability in your work history is a good thing to lenders. Getting a new job may not affect your ability to qualify for a loan - particularly if you are improving your salary. But for some people, switching jobs during the mortgage application process could bring concern and hinder your application.

Don't switch banks or move cash around in your bank accounts. Your lending institution will instruct the submission of recent bank statements for all of your accounts: checking, savings, money market, and other liquid assets. To eliminate potential fraud, most loans need a thorough paper trail to document the source of all funds. Changing banks or transferring finances elsewhere - for whatever purpose - may make it harder for your lender to review your funds.

Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, the good faith deposit remains yours. Your FSBO seller may not realize that these good faith funds must be used for your expenses upon closing. An attorney or other type of neutral party can hold onto your earnest funds, or you may put them temporarily into a trust account until closing. The final disposition of good faith money, if your home purchase fails, should be documented in the purchase agreement with your seller.

At Bright Vision Mortgage, we answer questions about this process every day. Give us a call at 9043423622.