What to Avoid During your Home Purchase

Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the loan is approved. It's wise to remember that until you get the keys, your lender is watching your finances very closely. We have given you a list of actions below we suggest you avoid when waiting for closing.

Don't overspend on big-ticket items Although you will be listing ways to turn your new house into a showplace, try to stay away from big ticket purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until the closing of your loan. You may send up red flags with your lender if you buy your electronics on your credit cards in the middle of your loan process. Using cash to buy big items can also create a mistake: most lenders consider your available cash when approving your loan.

Don't get a new career. Lenders look for a consistent job history on your application forms. Getting a new job before you apply for a mortgage may not affect your approval at all. But for some, changing jobs during the mortgage loan approval process may raise concern and affect your application.

Don't take your accounts to a new bank or move around your finances. While the lender considers your mortgage package, you will likely be instructed to submit bank statements for the last two or three months for your checking accounts, savings accounts, money market funds and other liquid finances. To detect potential fraud, most lenders require thorough paperwork to verify the source of all cash. No matter the purpose, moving banks or moving money from one account to another might raise a red flag with the lender and slow your approval process.

Don't give cash directly to your seller (usually in cases of "for sale by owner") for a "good faith" deposit. Your good faith deposit does not belong to the seller: it is actually yours until the sale closes. Any earnest money is to go toward your expenses upon closing; some sellers may not know this. We recommend that you put the deposit into a trust account, or get an attorney to hold it until the deal closes. If your transaction fails, your purchase contract should specify to whom your good faith funds should go.

Nationwide Home Loans can answer questions about these "Don'ts" and many others. Call us at 5626935048.