Things to Avoid While Purchasing a Home

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. Until closing, there are still some hoops to jump through. Below you'll find a list of actions to avoid during this crucial time of your home purchase.

Don't buy big-ticket items. You may be tempted to buy that new sofa for the soon-to-be-yours living room, but it's advisable to stay away from making big ticket buys like furniture, appliances, electronic equipment, or vacations until closing. Financing your stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. It's also a red flag to make those big-ticket purchases using cash. Lenders are looking at your cash reserve when considering your loan.

Don't look for a new career. Consistency in your career history is a positive thing to lending institutions. Finding a new job (particularly one with a better paycheck) may not jeopardize your ability to qualify for a mortgage. However, if you switch careers before approval, your loan process could fail or be slowed down.

Don't move cash around or change banks. Most lenders will ask for recent bank statements for accounts in your name: savings, checking, money market, and other liquid assets. Your lender hopes to see a steady rise and fall of your funds over the pay period, in the interest of avoiding fraud. Changing banks or transferring money to another account - no matter the purpose - may make it difficult for your lender to verify your funds.

Don't give money directly to your seller (commonly in cases of "for sale by owner") to be considered earnest money. As a rule, your good faith deposit is yours, not the seller's until the sale is final. Your FSBO seller might not know that the good faith funds must go toward your expenses at closing. A neutral party, like an attorney can hold your earnest funds, or you may place them temporarily into a trust account until closing. Your contract should document to whom the funds go if the home purchase fails.

Bright Vision Mortgage can walk you through the pitfalls of getting a mortgage. Call us: 9043423622.