Things to Avoid While Buying a New Home

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. There are still a few major hurdles to jump before the house is realy yours. 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 Although you will be dreaming of ways to turn your new home into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Financing your stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Using cash to purchase big items can even create an issue: most banks take into consideration your available cash when approving your loan.

Don't get a new career. Your recent career history should show stability. Finding a new job (particularly one with a bigger salary) may not affect your ability to qualify for your mortgage. However, if you switch careers before approval, your loan process could fail or be bogged down.

Don't switch banks or move finances around in your accounts. Bank statements from the last few months for accounts in your name (checking, savings, money market, and other accounts) will be studied as the lending institution considers your mortgage application. To detect potential fraud, most lending institutions want detailed paperwork to determine the source of all incoming funds. No matter the purpose, changing banks or transferring funds may raise a red flag with your lender and slow down your qualification process.

Don't give money directly to your seller (generally in the case of of "for sale by owner") to be used as a "good faith" deposit. Until the sale is complete, the good faith deposit remains yours. Some FSBO sellers may not realize that your good faith money should go toward your expenses upon closing. An attorney or other type of neutral party can hold onto your earnest funds, or you may place them temporarily into a trust account until closing. Should your home purchase fail, the contract with the seller should dictate where this earnest money should go.

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