What to Avoid During your Home Purchase

Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the loan is approved. There still remain a few major hurdles to jump before closing. We have listed some actions below you will want to stay away from when waiting for closing.

Don't overspend on big-ticket items Although you may be listing ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or furniture. We also recommend that you stay away from vacations and car purchases until your loan closes. You may send up red flags with your lender if you finance your electronics on your credit cards in the middle of your loan process. Using cash to buy big-ticket items can even be a mistake: many banks consider your cash reserve when approving your application.

Don't look for a new job. Your recent job history should show consistency. Getting a new job may not jeopardize your ability to qualify for a loan - particularly if you are improving your salary. However, switching jobs during the approval process could influence your approval.

Don't change banks or move finances around in your bank accounts. Bank statements from the last few months for all of your accounts (savings, checking, money market, and others) will probably be reviewed as the lending institution considers your mortgage application. To avoid potential fraud, most lenders require thorough paperwork to document the source of all incoming funds. Even for innocent purposes, transferring finances or switching banks might make it harder for the lender to document your bank history.

Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, the good faith money remains yours. A FSBO seller might not realize that any earnest money must go toward your expenses upon closing. Find a lawyer or other neutral person who is able to hang on to the funds or place them in a trust account until closing. If your home purchase fails, the purchase agreement should document where your earnest money should go.

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