Things to Avoid While Purchasing a New Home

Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the loan is approved. It's wise to remember that until you get the keys, your lender is watching your accounts very closely. Below you'll find a list of things to avoid during this crucial time of your home purchase.

Don't empty your wallet on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from big purchases like furniture, jewelry, appliances, or vacations until the loan closes. Financing your bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Since lenders are reviewing your bank accounts, a large cash purchase is also a mistake.

Don't look for a new career. Your recent job history should show consistency. Changing jobs may not affect your ability to qualify for a loan - particularly if you are getting a better salary. However, if you switch careers before approval, your process could fail or be bogged down.

Don't move cash around or change banks. Bank statements from the last few months for accounts in your name (checking, savings, money market, and other assets) will be studied as the lending institution considers your approval. To avoid potential fraud, most lenders need detailed paperwork to verify the source of all cash. Even for innocent reasons, transferring funds or switching banks might make it more difficult for your lender to confirm your bank history.

Don't give funds directly to your seller (commonly in the case of of "for sale by owner") for a "good faith" deposit. Until the completion of the deal, the good faith deposit actually belongs to you. Your earnest funds are to go toward your expenses closing; a individual seller may not know this. Find a lawyer or other neutral party who is able to hang on to the funds or put them in a trust account until closing. The disposition of good faith funds, if your sale fails, should be documented in the contract with the seller.

At VSI Home Lending, we answer questions about this process every day. Give us a call at 2603382561.