What to Avoid During a Home Purchase

In the rush of excitement 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. It's wise to remember that until you get the keys, your lender is watching your accounts very closely. Here are some things to avoid during the home buying process to assure the transaction goes smoothly.

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 stay away from expensive purchases like furniture, cars, appliances, or vacations until closing. Financing new furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Using cash to purchase big-ticket items can even create a bad idea: most lending institutions look at your cash reserve when approving your loan.

Don't look for a new job. Lending Institutions look for a consistent work history on your paperwork. Getting a new career before you apply for a loan may not jeopardize your approval at all. But for some people, getting a new job during the mortgage application process may bring concern and stymie your approval.

Don't move finances around or change banks. As the lender considers your loan package, you will probably be required to provide bank statements for the last few months on your saving and checking accounts, money market funds and other liquid wealth. In order to detect fraud, lenders will need a clear and consistent picture of how you earn your money and where any additional wealth comes from. Even for practical reasons, transferring funds or changing banks might make it harder for the lender to confirm your account history.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. As a rule, your earnest money is yours, not the seller's until closing. Some FSBO sellers might not realize that this good faith money should be applied to your expenses at closing. A neutral party, like an attorney can hold your earnest money, or you may put it temporarily into a trust account until closing. The purchase contract should dictate who keeps the deposit if the transaction falls through.

At Nationwide Home Loans, we answer questions about this process every day. Call us: 5626935048.