Things to Avoid While Purchasing a Home

Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the lender approves the loan. Until closing, there are still some hurdles to jump. We have listed some things below you will want to avoid when waiting for your loan to close.

Don't buy luxury items. Although you will be dreaming of ways to turn your new home into a castle, avoid major purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and vehicle purchases until your loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Since lending institutions are examining your financial accounts, a large cash purchase is also a bad idea.

Don't look for a new career. Lenders feel comfortable seeing a consistent career history on your application forms. Getting a new job may not jeopardize your ability to qualify for a mortgage loan - particularly if you are going to be making more money. However, finding a new job during your approval process may influence whether or not you are approved.

Don't change banks or move money around in your accounts. Bank statements from the last two or three months for accounts in your name (checking, savings, money market, and other assets) will be studied as the lending institution makes decisions regarding your approval. The lender is looking for a steady flow of your funds over the month, in order to avoid fraud. No matter the reason, moving banks or moving funds from one account to another may raise a red flag with the lender and slow your loan process.

Don't give funds directly to your seller (commonly in the case of of "for sale by owner") for earnest money. Your earnest money does not belong to the seller: it remains yours until the sale closes. Although your FSBO seller might not realize this, the earnest money must be applied to the buyer's closing expenses. An attorney or other type of neutral party can hold onto your earnest funds, or you may put them temporarily into a trust account until closing. Should your home purchase fail, the contract with the seller should document to whom your earnest money should go.

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