Things to Avoid While Purchasing a New Home

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With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. It's best to remember that until your keys are in hand, your lender is watching your finances very closely. Below you'll find a list of actions to avoid during this critical time of your home purchase.

Don't buy big-ticket items. Although you may be planning ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and vehicle purchases until your loan closes. Using plastic to buy new living room furniture could compromise your loan process by altering your numbers dramatically. Using cash to buy big items can even create a problem: many lenders take into consideration your cash on hand when approving your mortgage loan.

Don't get a new career. Lending Institutions look for a consistent work history on your paperwork. Finding a new job (especially one with a better paycheck) may not hinder your ability to qualify for a loan. However, if you switch careers before approval, your loan process could fail or be stalled.

Don't switch your accounts to a new bank or move around your cash. Bank statements from recent months for your accounts (checking, savings, money market, and others) will likely be analyzed as the lending institution considers your loan application. The lending institution wants to see a consistent rise and fall of your funds each month, in order to avoid fraud. Switching banks or transferring money to another account - for whatever purpose - might hinder the documentation of your accounts.

Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money is yours, not the seller's until closing. Although your seller might not realize this, any earnest money should be applied to your closing expenses. Find a lawyer or other neutral person who will hold the money or place it in a trust account until closing. The contract should dictate who gets the deposit if the transaction falls through.

Premier Nationwide Lending can answer questions about these "Don'ts" and many others. Give us a call at (926) 228-1944.