What to Avoid During your Home Purchase

What's better than getting a bunch of new furnishings to go in your future home? Nothing. But buying big ticket items before your loan closes could be trouble. There still remain a few major hurdles to jump before your loan closes. Below you'll find a list of actions to stay away from during this critical time of your home purchase.

Don't throw your money around. Although you may be listing ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. You will also want to stay away from vacations and car purchases until your loan closes. Using credit cards to buy furniture could jeopardize your lending process by changing your numbers dramatically. Because lenders are looking closely at your financial accounts, a large cash purchase is also a bad idea.

Don't look for a new career. Lenders look for a consistent career history on your application. Finding a new job (especially one with a bigger salary) may not hinder your ability to qualify for a loan. However, switching jobs in the middle of the approval process might influence your approval.

Don't switch banks or move cash around in your accounts. Most lenders will require you to produce recent bank statements on your accounts: savings, checking, money market, and other assets. To eliminate fraud, lenders need a clear and consistent picture of how you earn your money and where additional wealth comes from. No matter the reason, changing banks or transferring funds may raise a red flag with your lender and slow down your application process.

Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, the good faith deposit remains yours. Although your FSBO seller might not realize this, the good faith money should be applied to the buyer's closing expenses. A neutral party, like an attorney can hold onto your earnest money, or you may put it temporarily into a trust account until closing. Your purchase agreement should specify where the funds go if the home purchase fails.

U.S.A. Lending, Inc. can walk you through the pitfalls of getting a mortgage. Give us a call: 305-967-7200.