Things to Avoid While Buying a Home

With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. Keep in mind that until your keys are in hand, your lender is watching your accounts very closely. Here are some actions to stay clear of before closing to be sure the transaction goes well.

Don't make expensive purchases. Although you may be planning ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until your loan closes. Financing new bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Using cash to purchase big-ticket items can also be a problem: many lending institutions look at your cash on hand when approving your mortgage loan.

Don't go on a career search. Lending Institutions like to see a consistent career history on your application forms. Changing jobs may not affect your ability to qualify for a mortgage loan - particularly if you are going to be making more money. However, switching jobs during your loan process could affect your approval.

Don't take your accounts to a new bank or move around your cash. Your lender will instruct the submission of recent bank statements of accounts in your name: checking, savings, money market, and other assets. In order to detect fraud, lenders look for a consistent portrayal of how you earn your money and where additional money comes from. No matter the reason, switching banks or moving money from one account to another might raise a red flag with your lender and slow down your application process.

Don't give cash directly to your seller (commonly in the case of of "for sale by owner") to be used as earnest money. Your earnest money does not belong to the seller: it is actually yours until the transaction is final. Your seller might not know that these good faith funds should go toward your expenses at closing. Find a lawyer or other neutral party who is able to hang on to the deposit or place it in a trust account until you close. Should your home purchase fail, your contract with the seller should document to whom your good faith funds should go.

Bright Vision Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call at 9043423622.

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