What to Avoid During your Home Purchase

With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. Until the house is really yours, there still remain some hoops to jump through. We have listed some actions below you will want to avoid when waiting for closing.

Don't empty your wallet on big-ticket items Although you will be planning ways to turn your new home into a showplace, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Financing your furniture with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. It's even a red flag to make those huge purchases with cash. Lending Institutions are looking at your cash reserve when considering your loan.

Don't go on a job search. Your recent career history should show stability. Getting a new job before you apply for a loan may not compromise your approval at all. But for some, getting a new job during the mortgage loan approval process could raise concern and stymie your approval.

Don't switch banks or move finances around in your accounts. Bank statements from the last few months for your accounts (checking, savings, money market, and other accounts) will likely be studied as the lender considers your approval. To detect potential fraud, most lending institutions want thorough paperwork to determine the source of all cash. No matter the purpose, moving banks or moving funds from one account to another may raise a red flag with your lender and slow your approval process.

Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money is yours, not the seller's until the sale is final. Some FSBO sellers might not realize that this good faith money is to go toward your expenses upon closing. Get a lawyer or other neutral party who will hang on to the money or put it in a trust account until closing. The disposition of good faith funds, if your home purchase fails, should be indicated in the purchase agreement with your seller.

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