What to Avoid During your Home Purchase

What's better than getting a bunch of new furniture to go in your future home? Nothing. But buying big ticket items before your loan closes could be trouble. It's wise to remember that until closing, your lender is watching you very closely. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.

Don't overspend on big-ticket items You may be tempted to buy that new easy-chair for the soon-to-be-yours den, but it's advisable to stay away from making large buys like furniture, appliances, jewelry, or cars until closing. Using plastic to buy furniture could jeopardize your lending process by distorting your numbers. It's also a bad idea to make those huge purchases using cash. Lenders are looking at your cash on hand when considering your loan.

Don't go on a career search. Lending Institutions look for a consistent job history on your application forms. Changing jobs may not compromise your ability to qualify for a loan - particularly if you are getting a bigger paycheck. However, if you switch careers before your loan is approved, your process could fail or be stalled.

Don't move finances around or change banks. As the lending institution reviews your mortgage application, you will probably be asked to submit bank statements for recent months for your saving and checking accounts, money market accounts and other liquid wealth. To detect fraud, lenders require a consistent portrayal of how you earn your money and where additional wealth comes from. No matter the purpose, switching banks or transferring money can raise a red flag with the lender and impede your approval process.

Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Your earnest money does not belong to the seller: it remains yours until the sale closes. Some sellers may not know that the good faith money should be applied to your expenses at closing. A neutral party, like an attorney can hold your funds, or you may place them temporarily into a trust account until closing. If your sale falls through, your contract with the seller should dictate where your earnest money should go.

At Tenby J. Dahman The Dahman Team , we answer questions about this process every day. Give us a call: 3038627760.