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 carrying their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before your loan closes. We have listed some actions below we suggest you avoid when waiting for your loan to close.

Don't buy big-ticket items. Although you will be planning ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you keep away from vacations and car purchases until your loan closes. Using credit cards to buy new living room furniture could jeopardize your loan process by altering your numbers dramatically. Using cash to purchase big items can even create an issue: many lenders consider your available cash when approving your mortgage.

Don't get a new career. Consistency in your work history is a positive thing to banks and other lenders. Changing jobs may not affect your ability to qualify for a loan - particularly if you are getting a bigger paycheck. However, finding a new career during your approval process could influence your approval.

Don't take your accounts to a new bank or move around your money. While your lending institution considers your mortgage loan package, you will probably be instructed to submit bank statements for recent months on your checking and savings accounts, money market funds and other liquid finances. To detect potential fraud, most lending institutions want detailed paperwork to verify the source of all cash. Even for practical reasons, moving around cash or changing banks could make it more difficult for your lender to verify your account history.

Don't hand over 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 up until the deal closes. Some FSBO sellers may not know that any earnest money is to be applied to your expenses upon closing. A neutral party, like an attorney can hold onto your deposit, or you may put it temporarily into a trust account until closing. If your home purchase fails, your contract with the seller should specify where the earnest money should go.

At REDDISH BULL FINANCE, INC. | NMLS #1247892, we answer questions about this process every day. Call us: 561-475-2281.