What to Avoid During a Home Purchase

Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the lender approves their loan. Until the keys are handed over, there still remain some hurdles to jump. We have given you a list of things below you will want to stay away from when waiting for closing.

Don't buy big-ticket items. Although you may be dreaming of ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and vehicle purchases until your loan closes. Financing new furniture with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Using cash to purchase big-ticket items can even be a bad idea: most banks look at your cash on hand when approving your loan.

Don't look for a new career. Consistency in your job history is a good thing to lenders. Finding a new career (particularly one with a bigger salary) may not change your ability to qualify for a loan. However, finding a new career in the middle of the loan process could influence your approval.

Don't switch your accounts to a new bank or move around your cash. Bank statements from the last few months for all of your accounts (savings, checking, money market, and other assets) will be analyzed as the lender considers your mortgage application. To avoid potential fraud, most lending institutions need thorough paperwork to document the source of all cash. No matter the purpose, moving banks or moving money from one account to another can raise a red flag with the lender and slow your approval process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until the sale is complete, the good faith deposit actually belongs to you. Your good faith money is to be used for your expenses closing; some sellers might not realize this. A neutral party, like an attorney can hold onto your deposit, or you may put it temporarily into a trust account until you close. The contract should indicate where the money goes if the transaction does not go through.

Dayspring Bank can walk you through the pitfalls of getting a mortgage. Give us a call: 4025970500.

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