Things to Avoid While Purchasing a Home

Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the loan is approved. Until your loan closes, there still remain some hoops to jump through. 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. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from major purchases like furniture, jewelry, appliances, or vacations until closing. Using credit cards to buy new living room furniture could compromise your loan process by changing your numbers dramatically. It's also a red flag to make those big-ticket purchases with cash. Lenders are looking at your available cash when considering your loan.

Don't look for a new job. Consistency in your job history is a good thing to banks and other lenders. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. But for some, changing jobs during the mortgage application process might bring concern and stymie your application.

Don't change banks or move finances around in your accounts. Most lenders will instruct the submission of recent bank statements of all of your accounts: savings, checking, money market, and other assets. Your lender looks for a consistent flow of your funds over the month, in the interest of avoiding fraud. Switching banks or transferring money to another account - for whatever purpose - may make it difficult for the lender to review your funds.

Don't give cash directly to your seller (usually in the case of of "for sale by owner") to be considered earnest money. As a rule, your good faith money is yours, not the seller's until the sale is final. Your seller may not realize that the good faith funds must be applied to your expenses upon closing. Get a lawyer or other neutral party who will hang on to the funds or place them in a trust account until you close. Your purchase agreement should document to whom the funds go if the transaction falls through.

Tenby J. Dahman The Dahman Team can answer questions about these "Don'ts" and many others. Give us a call at 3038627760.