What to Avoid During your Home Purchase

What's more fun than buying a bunch of new stuff to go in your future home? Nothing. But buying big ticket items before closing could be trouble. There are still a few major hurdles to jump before the house is realy yours. Here are some actions to avoid during the home buying process to assure the transaction goes smoothly.

Don't buy big-ticket items. It may be tempting to order that new Turkish rug for the soon-to-be-yours den, but it's advisable to stay away from making major buys like furniture, appliances, jewelry, or vacations until closing. Financing your furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Using cash to buy big-ticket items can even create an issue: many lending institutions consider your cash on hand when approving your application.

Don't look for a new career. Lending Institutions like to see a consistent career history on your application forms. Getting a new career before you start the application process for a loan may not jeopardize your approval at all. But for some people, getting a new job during the mortgage loan approval process could bring concern and hinder your application.

Don't move finances around or change banks. While your lender reviews your loan package, you will probably be instructed to submit bank statements for the last few months for your saving and checking accounts, money market accounts and other liquid finances. The lender is looking for a consistent flow of your money over the month, in the interest of avoiding fraud. Switching banks or transferring finances elsewhere - even if its merely to consolidate funds - could hinder the documentation of your funds.

Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until closing, the good faith deposit remains yours. Although your FSBO seller may not understand this, your good faith money must be used for your closing expenses. It's advisable to put the funds into a trust account, or get a neutral person, like a lawyer to hold them until the deal closes. The contract should dictate who gets the deposit if the transaction fails.

At BeneGroup, Inc., we answer questions about this process every day. Give us a call: 4083956018.