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 carrying their enthusiasm straight to the mall or furniture store. There still remain a few major hurdles to jump before the house is realy yours. Below you'll find a list of things to avoid during this critical time of your home purchase.

Don't buy luxury items. Although you may be planning ways to turn your new house into a castle, try to stay away from big ticket purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until your loan closes. Financing new Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. It's even a red flag to make those huge purchases using cash. Lending Institutions are looking at your available cash when considering your loan.

Don't look for a new career. Your recent job history should show consistency. Finding a new job (particularly one with a better salary) may not change your ability to qualify for your loan. However, switching careers during your loan process may influence whether or not you are approved.

Don't switch banks or move money around in your accounts. Bank statements from recent months for accounts in your name (checking, savings, money market, and other assets) will probably be studied as the lending institution makes decisions regarding your loan application. To avoid fraud, lenders want to see clear documentation of how you earn your living and where additional funds come from. No matter the reason, switching banks or moving money from one account to another can raise a red flag with the lender and slow down your approval process.

Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Until the completion of the deal, the good faith money actually belongs to you. The good faith money is to go toward your expenses closing; some sellers might not know this. It's wise to put the funds into a trust account, or get an attorney to hold them until the deal closes. The disposition of earnest funds, if your sale fails, should be included in the purchase agreement with the seller.

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