Things to Avoid While Purchasing a Home

Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the loan is approved. There are still a few major hurdles to jump before the keys are handed over. Here are some things to stay clear of during the home buying process to be sure your transaction goes well.

Don't overspend on big-ticket items You may be itching to order that new Turkish rug for the soon-to-be-yours parlor, but it's best to stay away from making major buys like furniture, appliances, jewelry, or vacations until closing. Your credit numbers could change suddenly if you make a huge purchase using plastic. It's also a red flag to make those big-ticket purchases using cash. Lending Institutions are examining your cash reserve when considering your loan.

Don't look for a new job. Consistency in your work history is a positive thing to lending institutions. Changing jobs may not compromise your ability to qualify for a loan - particularly if you are getting a better salary. However, getting a new career in the middle of your loan process could influence whether or not you are approved.

Don't move cash around or switch banks. Your lender will instruct the submission of recent bank statements for your accounts: checking, savings, money market, and other liquid assets. To avoid potential fraud, most lenders need thorough paperwork to determine the source of all cash. No matter the reason, switching banks or transferring funds may raise a red flag with your lender and impede your application process.

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. Some sellers might not know that these good faith funds must be used for your expenses at closing. Find a lawyer or other neutral party who will hold the money or put it in a trust account until closing. The final disposition of earnest money, if your transaction falls through, should be written in the contract with the seller.

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