Things to Avoid While Buying a Home

What's better than buying a bunch of new furnishings to adorn your future home? Nothing. But making big purchases before closing can be an error. Until closing, there are still some hurdles to jump. Here are some things to avoid during the home buying process to be sure the transaction goes smoothly.

Don't overspend on big-ticket items You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but keep away from big purchases like furniture, cars, appliances, or vacations until your loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. Using cash to purchase big-ticket items can even be a problem: many lending institutions consider your cash on hand when approving your mortgage loan.

Don't look for a new career. Consistency in your job history is a positive thing to banks and other lenders. Getting a new job may not compromise your ability to qualify for a loan - particularly if you are getting a better salary. But for some people, switching jobs during the mortgage loan approval process could bring concern and affect your application.

Don't change banks or move money around in your accounts. While your lender considers your mortgage loan package, you will likely be required to submit bank statements for the last two or three months for your checking accounts, savings accounts, money market accounts and other liquid assets. The lending institution is looking for a consistent rise and fall of your money over the month, in order to rule out fraud. No matter the purpose, switching banks or moving money from one account to another may raise a red flag with your lender and slow your qualification process.

Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's until closing. Your good faith money is to go toward your expenses upon closing; some sellers might not know this. We recommend that you put the money into a trust account, or get an attorney to hold it until the deal closes. The final disposition of earnest money, if your home purchase falls through, should be indicated in the contract with the seller.

Bright Vision Mortgage can answer questions about these "Don'ts" and many others. Call us: 9043423622.