Things to Avoid While Purchasing a New Home

Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the lender approves their loan. It's best to remember that until you get the keys, your lender is watching you very closely. Below you'll find a list of actions to avoid during this critical time of your home purchase.

Don't empty your wallet on big-ticket items You may be tempted to order that new Turkish rug for the soon-to-be-yours living room, but it's best to avoid making big ticket purchases like furniture, appliances, electronic equipment, or cars until your home loan closes. Using plastic to buy new living room furniture could jeopardize your loan process by altering your numbers dramatically. It's also a red flag to make those big-ticket purchases using cash. Lenders are looking at your available cash when considering your loan.

Don't look for a new career. Your recent career history should show stability. Getting a new career before you start the application process for a mortgage may not compromise your approval at all. However, finding a new career during your application process might affect your approval.

Don't change banks or move money around in your bank accounts. Your lending institution will ask for recent bank statements on all of your accounts: savings, checking, money market, and other liquid assets. To detect fraud, lenders require a consistent portrayal of how you earn your money and where additional money comes from. Switching banks or transferring money elsewhere - for whatever purpose - might make it difficult for your lender to document your funds.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Until closing, any good faith deposit remains yours. Although some FSBO sellers may not understand this, the earnest money must be applied to the buyer's closing expenses. It's advisable to put the deposit into a trust account, or get a neutral party, like an attorney, to hold it until closing. The final disposition of good faith money, in the case of a failed transaction, should be included in the purchase agreement with your seller.

VSI Home Lending can walk you through the pitfalls of getting a mortgage. Give us a call: 2603382561.

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