Things to Avoid While Purchasing a New 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 lender approves the loan. It's best to remember that until closing, your lender is watching your accounts very closely. Below you'll find a list of things to avoid during this critical time of your home purchase.

Don't overspend on big-ticket items Although you may be planning ways to turn your new home into a castle, avoid major purchases like appliances, electronics, or furniture. We also recommend that you keep away from vacations and vehicle purchases until the closing of your loan. Financing new stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Since lending institutions are examining your financial accounts, a large cash purchase is also a bad idea.

Don't look for a new career. Lending Institutions feel comfortable seeing a consistent job history on your application forms. Finding a new career (especially one with a better paycheck) may not affect your ability to qualify for your loan. However, if you switch careers before your loan is approved, your process could fail or be bogged down.

Don't switch your accounts to a new bank or move around your money. Bank statements from recent months for all of your accounts (checking, savings, money market, and other assets) will probably be analyzed as the lending institution considers your application. To detect fraud, lenders want to see a clear and consistent picture of how you earn your money and where any additional funds come from. Changing banks or transferring money to another account - no matter the purpose - might hinder the review of your funds.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your earnest money is yours, not the seller's until the sale is final. The earnest funds are to be used for your expenses upon closing; some FSBO sellers may not know this. Get an attorney or other neutral person who will hold the funds or place them in a trust account until you close. The final disposition of earnest funds, if your transaction fails, should be documented in the purchase agreement with the seller.

At U.S.A. Lending, Inc., we answer questions about this process every day. Give us a call at 305-967-7200.