What to Avoid During your Home Purchase

In the rush of excitement 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 your loan closes, there still remain 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 big-ticket items. Although you may be listing ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or furniture. You will also want to avoid vacations and car purchases until your loan closes. You may send up red flags with your lender if you purchase your furniture on your credit cards during your loan process. Using cash to buy big-ticket items can even be an issue: most lenders consider your available cash when approving your mortgage loan.

Don't look for a new career. Lending Institutions look for a consistent career history on your application forms. Finding a new job (especially one with a bigger salary) may not affect your ability to qualify for your mortgage loan. But in some cases, switching jobs during the mortgage approval process may bring concern and hinder your application.

Don't change banks or move finances around in your accounts. As the lender considers your loan application, you will likely be asked to produce bank statements for recent months on your checking accounts, savings accounts, money market funds and other liquid assets. In order to detect fraud, lenders look for a clear and consistent picture of how you earn your living and where any additional wealth comes from. Even for practical reasons, moving around cash or changing banks may make it more difficult for the lending institution to verify your account history.

Don't give money directly to your seller (usually in the case of of "for sale by owner") for a "good faith" deposit. As a rule, your good faith money belongs to you, not the seller until the deal closes. Your good faith funds are to be applied to your expenses closing; some sellers may not know this. Find an attorney or other neutral party who will hang on to the funds or place them in a trust account until closing. If your sale falls through, your contract with the seller should indicate to whom the good faith deposit should go.

At Dayspring Bank, we answer questions about this process every day. Give us a call: 4025970500.