Things to Avoid While Buying a New Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. Until your loan closes, there are still some hurdles to jump. Below you'll find a list of actions to avoid during this critical time of your home purchase.

Don't overspend on big-ticket items Although you will be dreaming of ways to turn your new house into a castle, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and vehicle purchases until the closing of your loan. Financing your furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Because lending institutions are reviewing your bank accounts, a large cash purchase is also a bad idea.

Don't look for a new job. Lenders like to see a consistent work history on your application forms. Getting a new career before you start the application process for a mortgage loan may not compromise your approval at all. However, if you switch careers before you qualify, your mortgage process could fail or be stalled.

Don't switch banks or move cash around in your bank accounts. Bank statements from recent months for accounts in your name (savings, checking, money market, and others) will probably be reviewed as the lending institution makes decisions regarding your approval. To detect potential fraud, most lenders need a thorough paper trail to verify the source of all cash. Even for practical reasons, moving around cash or changing banks might make it harder for your lending institution to verify your bank history.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Your good faith money does not belong to the seller: it is actually yours until closing. Although your FSBO seller might not realize this, your earnest money must be applied to your closing expenses. Get a lawyer or other neutral party who is able to hold the money or put it in a trust account until closing. The purchase agreement should document where the money goes if the home purchase fails.

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