Don't Trip Yourself up While Buying your Home

With the thrill 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 appliance store. Until the keys are handed over, there still remain some hoops to jump through. Below you'll find a list of things to stay away from during this crucial time of your home purchase.

Don't make expensive purchases. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but keep away from major purchases like furniture, jewelry, appliances, or vacations until closing. Using plastic to buy new living room furniture could jeopardize your loan process by distorting your numbers. Because lending institutions are reviewing your financial accounts, a large cash purchase is also not advised.

Don't look for a new career. Lending Institutions look for a consistent job history on your application. Finding a new job (especially one with a better paycheck) may not jeopardize your ability to qualify for your loan. However, if you switch careers before approval, your loan process could fail or be slowed down.

Don't switch banks or move cash around in your bank accounts. Bank statements from the last few months for your accounts (checking, savings, money market, and other assets) will likely be analyzed as the lending institution makes decisions regarding your loan application. To eliminate fraud, lenders require clear documentation of how you earn your money and where additional funds come from. Even for innocent purposes, moving around funds or changing banks may make it harder for the lending institution to verify your bank history.

Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not to the seller up until the sale is final. Your good faith money is to go toward your expenses closing; some sellers may not understand this. An attorney or other type of neutral party can hold onto your earnest money, or you may put it temporarily into a trust account until closing. Should your home purchase fail, the contract with the seller should indicate where your good faith funds should go.

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