Don't Trip Yourself up While Buying your Home

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. Until your loan closes, there still remain some hoops to jump through. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.

Don't empty your wallet on big-ticket items You may be itching to buy that new sofa for the soon-to-be-yours parlor, but it's best to stay away from making major buys like furniture, appliances, electronic equipment, or cars until closing. Using credit cards to buy new living room furniture could jeopardize your lending process by distorting your numbers. Because lenders are looking closely at your bank accounts, a large cash purchase is also not advised.

Don't go on a job search. Lending Institutions look for a consistent job history on your application. Getting a new career before you apply for a mortgage loan may not affect your approval at all. However, switching careers during the application process may affect your approval.

Don't switch banks or move money around in your bank accounts. Bank statements from the last two or three months for your accounts (savings, checking, money market, and other accounts) will probably be analyzed as the lender considers your loan application. To avoid potential fraud, most lending institutions want detailed paperwork to verify the source of all incoming funds. Even for innocent reasons, transferring finances or changing banks may make it difficult for your lender to document your account history.

Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it is actually yours until closing. Any good faith money is to be used for your expenses upon closing; the individual seller might not realize this. Get a lawyer or other neutral person who can hold the deposit or place it in a trust account until you close. Your purchase contract should specify who keeps the earnest funds if the transaction fails.

At Pacificwide Lending, we answer questions about this process every day. Call us at 9254610500.