What to Avoid During your Home Purchase

In the rush of excitement 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 your keys are in hand, there still remain some hurdles to jump. Here are some things to avoid during the home buying process to assure your transaction goes well.

Don't throw your money around. Although you will be listing ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Financing your stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Because lenders are reviewing your bank accounts, a large cash purchase is also not advised.

Don't get a new career. Lending Institutions feel comfortable seeing a consistent work history on your application. Finding a new job (particularly one with a better paycheck) may not change your ability to qualify for a mortgage loan. But for some, changing careers during the mortgage approval process might bring concern and hinder your application.

Don't move finances around or change banks. Bank statements from the last few months for all of your accounts (savings, checking, money market, and other accounts) will be reviewed as the lender makes decisions regarding your loan application. To detect fraud, lenders look for clear documentation of how you earn your money and where any additional money comes from. No matter the reason, switching banks or moving funds from one account to another can raise a red flag with the lender and slow your loan process.

Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not to the seller until the deal closes. Although your seller might not know this, any earnest money should be used for the buyer's closing expenses. Find a lawyer or other neutral party who is able to hang on to the funds or place them in a trust account until you close. The disposition of earnest funds, if your home purchase falls through, should be indicated in the purchase agreement with the seller.

At 1st Credential Mortgage Inc, we answer questions about this process every day. Call us: 2817780805.