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, some homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. Until your loan closes, there are still some hoops to jump through. Below you'll find a list of actions to avoid during this crucial time of your home purchase.

Don't buy luxury items. Although you will be listing ways to turn your new house into a showplace, try to stay away from major purchases like appliances, electronics, or furniture. We also recommend that you keep away from vacations and vehicle purchases until the closing of your loan. Using credit cards to buy furniture could jeopardize your lending process by changing your numbers dramatically. Since lenders are examining your financial accounts, a large cash purchase is also a mistake.

Don't look for a new career. Your recent work history should show stability. Getting a new job may not jeopardize your ability to qualify for a mortgage loan - particularly if you are improving your salary. However, getting a new career in the middle of your application process may affect whether or not you are approved.

Don't switch banks or move cash around in your accounts. While your lending institution considers your loan package, you will probably be asked to produce bank statements for recent months for your checking accounts, savings accounts, money market accounts and other liquid assets. To avoid potential fraud, most loans require detailed paperwork to determine the source of all cash. No matter the purpose, moving banks or transferring money may raise a red flag with your lender and slow your qualification process.

Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith money does not belong to the seller: it remains yours until the transaction is final. Although your seller may not know this, your good faith funds must be used for your closing expenses. Find a lawyer or other neutral person who will hang on to the funds or place them in a trust account until you close. If your sale falls through, your contract with the seller should dictate to whom this good faith deposit should go.

Dayspring Bank can answer questions about these "Don'ts" and many others. Call us at 4025970500.