Things to Avoid While Purchasing a New Home

In the rush of excitement 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. Keep in mind that until your keys are in hand, your lender is watching your accounts very closely. We have listed some actions below you will want to avoid when waiting for your loan to close.

Don't buy luxury items. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but stay away from expensive purchases like furniture, jewelry, appliances, or vacations until closing. Your credit numbers could change suddenly if you purchase new furniture using plastic. Using cash to purchase big-ticket items can even be a bad idea: most lenders look at your cash on hand when approving your application.

Don't go on a job search. Consistency in your work history is a good thing to lenders. Finding a new career (especially one with a bigger paycheck) may not affect your ability to qualify for a mortgage loan. However, if you switch careers before you qualify, your mortgage process could fail or be stalled.

Don't move finances around or switch banks. Your lender will instruct the submission of recent bank statements on your accounts: savings, checking, money market, and other assets. The lending institution looks for a steady flow of your money each pay period, in the interest of ruling out fraud. Even for innocent purposes, transferring money or switching banks might make it harder for the lender to document your bank history.

Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until closing, the good faith money remains yours. Although some FSBO sellers may not know this, the good faith money must be used for the buyer's closing expenses. Get a lawyer or other neutral person who is able to hold the deposit or place it in a trust account until you close. The contract should dictate where the deposit goes if the home purchase fails.

BeneGroup, Inc. can walk you through the pitfalls of getting a mortgage. Call us: 4083956018.