Things to Avoid While Buying a Home

What's more fun than getting a bunch of new furnishings to adorn your future home? Not much. But buying big ticket items before your loan closes can be a mistake. There still remain a few major hurdles to jump before closing. We have given you a list of actions below you will want to stay away from when waiting for closing.

Don't overspend on big-ticket items Although you will be planning ways to turn your new house into a castle, try to stay away from major purchases like appliances, electronics, or furniture. We also recommend that you stay away from vacations and vehicle purchases until your loan closes. You may send up red flags with your lender if you purchase new furniture on your credit cards in the middle of your loan process. It's even a red flag to make those big-ticket purchases using cash. Lenders are examining your cash on hand when considering your loan.

Don't get a new career. Consistency in your career history is a positive thing to banks and other lenders. Getting a new job may not compromise your ability to qualify for a mortgage loan - particularly if you are getting a better salary. However, finding a new career in the middle of your approval process may affect whether or not you are approved.

Don't switch your accounts to a new bank or move around your cash. While your lender considers your mortgage package, you will likely be required to provide bank statements for the last two or three months for your checking and savings accounts, money market accounts and other liquid finances. The lender will need to see a steady flow of your funds over the pay period, in the interest of avoiding fraud. Even for practical reasons, moving around funds or changing banks might make it more difficult for your lender to verify your bank history.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. As a rule, your good faith money is yours, not the seller's until the deal closes. Your seller might not realize that your good faith funds should go toward your expenses at closing. We recommend that you put the deposit into a trust account, or get an attorney to hold it until the closing of the sale. The purchase agreement should indicate who gets the money if the transaction fails.

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