What to Avoid During a Home Purchase

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. Until closing, there are still some hoops to jump through. Below you'll find a list of actions to avoid during this critical time of your home purchase.

Don't make expensive purchases. Although you will be dreaming of ways to turn your new house into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Your lender may send up red flags if you purchase your appliances on your credit cards during your loan process. Because lending institutions are perusing your financial accounts, a large cash purchase is also a bad idea.

Don't look for a new career. Stability in your work history is a good thing to lending institutions. Changing jobs may not compromise your ability to qualify for a mortgage loan - particularly if you are going to be making more money. However, getting a new job in the middle of your application process could influence whether or not you are approved.

Don't take your accounts to a new bank or move around your cash. Most lenders will require you to submit recent bank statements for all of your accounts: savings, checking, money market, and other liquid assets. The lending institution is looking for a consistent rise and fall of your funds each pay period, in the interest of avoiding fraud. Switching banks or moving money elsewhere - for whatever reason - may hinder the documentation of your funds.

Don't give cash directly to your seller (commonly in cases of "for sale by owner") for earnest money. Your earnest money does not belong to the seller: it is actually yours until closing. The FSBO seller might not know that the good faith money is to go toward your expenses upon closing. An attorney or other type of neutral party can hold onto your funds, or you may put them temporarily into a trust account until closing. The final disposition of good faith money, in the case of a failed transaction, should be included in the contract with your seller.

Pacificwide Lending can walk you through the pitfalls of getting a mortgage. Give us a call: 9254610500.