What to Avoid During a Home Purchase

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. Until the house is really yours, there still remain some hoops to jump through. Here are some things to stay clear of during the home buying process to be sure your transaction goes smoothly.

Don't buy big-ticket items. You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but keep away from big purchases like furniture, jewelry, appliances, or vacations until closing. Your credit numbers could change suddenly if you purchase new furniture using plastic. It's also a bad idea to make those big-ticket purchases using cash. Lenders are looking at your cash reserve when considering your loan.

Don't get a new career. Stability in your job history is a positive thing to lenders. Getting a new career before you apply for a mortgage may not jeopardize your approval at all. However, if you switch careers before you qualify, your loan process could fail or be slowed down.

Don't take your accounts to a new bank or move around your money. As your lender reviews your mortgage loan package, you will probably be required to provide bank statements for recent months on your saving and checking accounts, money market accounts and other liquid wealth. In order to avoid fraud, lenders look for clear documentation of how you earn your living and where additional money comes from. Even for practical purposes, moving around finances or switching banks could make it more difficult for your lender to confirm your bank history.

Don't give cash directly to your seller (usually in the case of of "for sale by owner") to be used as a "good faith" deposit. As a rule, your good faith deposit belongs to you, not to the seller up until the sale is final. Your good faith money is to go toward your expenses closing; some individual sellers might not understand this. Get a lawyer or other neutral party who can hold the deposit or put it in a trust account until closing. If your home purchase fails, your contract with the seller should indicate where your earnest money should go.

Firelight Mortgage Consultants can answer questions about these "Don'ts" and many others. Call us: 3032282254.