What to Avoid During a Home Purchase

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. Until your loan closes, there still remain some hoops to jump through. Here are some things to stay clear of during the home buying process to be sure the transaction goes well.

Don't empty your wallet on big-ticket items Although you will be listing ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to stay away from vacations and car purchases until your loan closes. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Using cash to purchase big items can also create an issue: many lenders take into consideration your available cash when approving your application.

Don't go on a career search. Consistency in your career history is a positive thing to lenders. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - particularly if you are getting a better salary. However, if you switch careers before your loan is approved, your mortgage process could fail or be slowed down.

Don't move money around or change banks. While the lender considers your mortgage package, you will likely be asked to submit bank statements for the last few months on your checking and savings accounts, money market accounts and other liquid finances. Your lending institution is looking for a consistent flow of your money each month, in the interest of avoiding fraud. Switching banks or transferring money to another account - for whatever purpose - may make it difficult for the lender to review your funds.

Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it remains yours until closing. Your good faith money is to go toward your expenses upon closing; a FSBO seller might not understand this. Find an attorney or other neutral party who will hold the funds or put them in a trust account until closing. The disposition of earnest funds, if your transaction fails, should be specified in the purchase agreement with your seller.

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