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 taking their enthusiasm straight to the mall or appliance store. There are still a few major hurdles to jump before the house is realy yours. We have given you a list of things below you will want to avoid when waiting for closing.

Don't empty your wallet on big-ticket items It may be tempting to order that new easy-chair for the soon-to-be-yours parlor, but it's best to stay away from making major purchases like furniture, appliances, electronic equipment, or cars until closing. Financing your furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Using cash to purchase big items can even be a bad idea: most banks consider your cash reserve when approving your application.

Don't go on a career search. Lenders like to see a consistent career history on your paperwork. Finding a new career (especially one with a bigger paycheck) may not jeopardize your ability to qualify for your loan. However, switching careers in the middle of your approval process could influence whether or not you are approved.

Don't switch your accounts to a new bank or move around your finances. While your lending institution reviews your mortgage loan application, you will likely be required to provide bank statements for the last few months on your checking accounts, savings accounts, money market accounts and other liquid assets. In order to eliminate fraud, lenders will need a clear and consistent picture of how you earn your money and where additional wealth comes from. Even for innocent reasons, transferring cash or switching banks could make it more difficult for your lending institution to document your account history.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. As a rule, your good faith money is yours, not the seller's until closing. Some FSBO sellers may not know that the earnest money is to go toward your expenses upon closing. A neutral party, like an attorney can hang onto your earnest funds, or you may place them temporarily into a trust account until you close. Your contract should specify who keeps the earnest funds if the home purchase falls through.

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