What to Avoid During a Home Purchase

Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the loan is approved. Keep in mind that until your keys are in hand, your lender is watching your finances very closely. We have given you a list of actions below you will want to stay away from when waiting for closing.

Don't make expensive purchases. You may be tempted to buy that new Turkish rug for the soon-to-be-yours den, but it's best to stay away from making big ticket purchases like furniture, appliances, electronic equipment, or cars until closing. Financing new bedroom furniture with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Because lenders are looking closely at your financial accounts, a large cash purchase is also a bad idea.

Don't look for a new career. Lenders like to see a consistent work history on your application. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. But for some, changing careers during the mortgage approval process may raise concern and hinder your approval.

Don't move money around or switch banks. Bank statements from the last two or three months for all of your accounts (savings, checking, money market, and other assets) will likely be reviewed as the lending institution makes decisions regarding your loan application. To detect fraud, lenders want to see a clear and consistent picture of how you earn your living and where additional funds come from. No matter the purpose, moving banks or moving funds from one account to another can raise a red flag with the lender and slow down your loan process.

Don't give funds directly to your seller (generally in the case of of "for sale by owner") to be considered a "good faith" deposit. Until the completion of the deal, any good faith deposit remains yours. Some sellers might not realize that your good faith funds is to be applied to your expenses upon closing. Find a lawyer or other neutral party who will hang on to the funds or place them in a trust account until closing. Your contract should indicate who keeps the deposit if the transaction does not go through.

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