Things to Avoid While Buying a Home

In the rush of excitement 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. Keep in mind that until you get the keys, 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 make expensive purchases. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until the loan closes. Using plastic to buy furniture could jeopardize your lending process by distorting your numbers. It's also a bad idea to make those large purchases using cash. Lending Institutions are looking at your available cash when considering your loan.

Don't look for a new job. Your recent career history should show consistency. Finding a new job (particularly one with a better salary) may not change your ability to qualify for your mortgage. However, getting a new job in the middle of the loan process may influence whether or not you are approved.

Don't move money around or change banks. Bank statements from the last two or three months for your accounts (checking, savings, money market, and others) will be analyzed as the lender considers your application. In order to eliminate fraud, lenders want to see clear documentation of how you earn your money and where additional funds come from. Even for innocent purposes, transferring funds or changing banks could make it difficult for your lending institution to verify your account history.

Don't give funds directly to your seller (generally in cases of "for sale by owner") for earnest money. Until the completion of the deal, the earnest money remains yours. Some sellers may not realize that these good faith funds is to go toward your expenses upon closing. Find a lawyer or other neutral party who is able to hang on to the funds or place them in a trust account until you close. Should your home purchase fail, the contract with the seller should specify to whom this earnest money should go.

Marshall Lending can answer questions about these "Don'ts" and many others. Give us a call at 9162758775.