What to Avoid During a Home Purchase

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. There still remain a few major hurdles to jump before closing. We have given you a list of things below we suggest you stay away from when waiting for closing.

Don't empty your wallet on big-ticket items You may be tempted to buy that new easy-chair for the soon-to-be-yours living room, but it's best to stay away from making large buys like furniture, appliances, jewelry, or vacations until your home loan closes. Using plastic to buy furniture could jeopardize your lending process by altering your numbers dramatically. It's also a red flag to make those big purchases with cash. Lenders are examining your cash on hand when considering your loan.

Don't look for a new job. Lending Institutions feel comfortable seeing a consistent career history on your application. Getting a new job may not affect your ability to qualify for a loan - especially if you are improving your salary. However, switching jobs in the middle of the approval process could influence your approval.

Don't move cash around or change banks. Bank statements from recent months for all of your accounts (checking, savings, money market, and other assets) will be analyzed as the lender considers your application. The lending institution wants to see a steady rise and fall of your money each month, in the interest of avoiding fraud. No matter the purpose, switching banks or transferring money may raise a red flag with the lender and impede your approval process.

Don't give money directly to your seller (usually in the case of of "for sale by owner") to be used as earnest money. As a rule, your good faith money belongs to you, not to the seller until the sale is final. The FSBO seller might not know that these good faith funds should go toward your expenses at closing. A neutral party, like an attorney can hold onto your deposit, or you may put it temporarily into a trust account until closing. The final disposition of earnest money, in the case of a failed transaction, should be specified in the contract with your seller.

Southwest Funding #841
Company NMLS # 303440 can walk you through the pitfalls of getting a mortgage. Call us: 5122916100.