What to Avoid During your Home Purchase

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

Don't buy luxury items. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but keep away from big purchases like furniture, jewelry, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. It's also a mistake to make those large purchases using cash. Lending Institutions are examining your cash on hand when considering your loan.

Don't go on a career search. Stability in your job history is a good thing to banks and other lenders. Finding a new career (particularly one with a better paycheck) may not affect your ability to qualify for a loan. But for some, changing jobs during the mortgage loan application process could raise concern and affect your approval.

Don't move finances around or switch banks. Bank statements from the last two or three months for your accounts (checking, savings, money market, and other assets) will likely be analyzed as the lending institution considers your approval. To eliminate potential fraud, most loans want detailed paperwork to determine the source of all funds. Even for innocent reasons, moving around cash or switching banks may make it harder for the lending institution to document your bank history.

Don't give 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 the seller until the sale is final. Any good faith funds are to go toward your expenses upon closing; some FSBO sellers might not know this. An attorney or other type of neutral party can hang onto your earnest money, or you may put it temporarily into a trust account until closing. The disposition of earnest funds, if your transaction fails, should be indicated in the purchase agreement with your seller.

Southwest Funding #841
Company NMLS # 303440 can answer questions about these "Don'ts" and many others. Call us: 5122916100.