What to Avoid During a 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. It's best to remember that until your keys are in hand, your lender is watching your finances very closely. We have given you a list of things below you will want to stay away from when waiting for your loan to close.

Don't buy luxury items. You may be tempted to buy that new Turkish rug for the soon-to-be-yours parlor, but it's best to stay away from making large purchases like furniture, appliances, jewelry, or cars until your home loan closes. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Since lenders are examining your financial accounts, a large cash purchase is also not advised.

Don't look for a new job. Lenders like to see a consistent career history on your application forms. Getting a new career before you start the application process for a mortgage may not get in the way of your approval at all. However, switching jobs in the middle of the application process might affect whether or not you are approved.

Don't switch banks or move money around in your accounts. Your lender will instruct the submission of recent bank statements on accounts in your name: checking, savings, money market, and other assets. Your lending institution needs to see a steady flow of your funds over the month, in the interest of avoiding fraud. Switching banks or moving funds to another account - for whatever reason - could hinder the documentation of your funds.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Your earnest money does not belong to the seller: it is actually yours until the transaction is final. A FSBO seller might not know that any good faith funds is to go toward your expenses at closing. Find a lawyer or other neutral person who is able to hang on to the money or place it in a trust account until you close. The purchase agreement should document to whom the deposit goes if the home purchase does not go through.

Firelight Mortgage Consultants can answer questions about these "Don'ts" and many others. Call us at 7209331025.