What to Avoid During your Home Purchase

With the thrill 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 hurdles to jump. Below you'll find a list of things to stay away from during this crucial time of your home purchase.

Don't make expensive purchases. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but stay away from big purchases like furniture, jewelry, appliances, or vacations until your loan closes. Using plastic to buy furniture could compromise your lending process by distorting your numbers. Because lending institutions are perusing your bank accounts, a large cash purchase is also a bad idea.

Don't look for a new job. Your recent job history should show stability. Getting a new job before you apply for a loan may not affect your approval at all. However, getting a new career in the middle of the application process could affect your approval.

Don't move cash around or change banks. As the lending institution reviews your loan application, you will likely be asked to provide bank statements for recent months for your checking accounts, savings accounts, money market accounts and other liquid wealth. The lending institution is looking for a consistent flow of your money over the month, in the interest of avoiding fraud. No matter the purpose, moving banks or moving money from one account to another might raise a red flag with the lender and slow down your approval process.

Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. As a rule, your good faith deposit belongs to you, not to the seller up until closing. Your seller may not realize that any good faith money should go toward your expenses at closing. Get an attorney or other neutral party who is able to hold the funds or put them in a trust account until you close. Should your sale fall through, your contract with the seller should specify where the good faith deposit should go.

VSI Home Lending can answer questions about these "Don'ts" and many others. Call us at 2603382561.

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