Things to Avoid While Purchasing a Home

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 furniture store. Until closing, there are still some hurdles to jump. We have given you a list of actions below we suggest you stay away from when waiting for your loan to close.

Don't throw your money around. It may be tempting to buy that new sofa for the soon-to-be-yours living room, but it's advisable to avoid making major buys like furniture, appliances, jewelry, or vacations until your home loan closes. Using plastic to buy new living room furniture could compromise your lending process by distorting your numbers. Since lending institutions are reviewing your bank accounts, a large cash purchase is also a bad idea.

Don't get a new job. Stability in your job history is a positive thing to banks and other lenders. Getting a new job before you apply for a loan may not jeopardize your approval at all. However, switching jobs in the middle of your loan process may influence your approval.

Don't move cash around or switch banks. Bank statements from the last two or three months for accounts in your name (savings, checking, money market, and other accounts) will likely be analyzed as the lender considers your loan application. To eliminate fraud, lenders will need a consistent portrayal of how you earn your money and where additional funds come from. Changing banks or transferring funds elsewhere - for whatever reason - may make it harder for your lender to verify your funds.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until closing, the good faith money remains yours. Although some individual sellers may not understand this, your good faith money should be used for the buyer's closing expenses. Get a lawyer or other neutral party who will hold the money or place it in a trust account until you close. Your contract should specify who gets the earnest funds if the home purchase does not go through.

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