What to Avoid During a Home Purchase

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. It's best to remember that until you get the keys, your lender is watching you very closely. Below you'll find a list of things to stay away from during this crucial time of your home purchase.

Don't buy big-ticket items. Although you may be listing ways to turn your new house into a showplace, try to stay away from major purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until your loan closes. Your lender may send up red flags if you buy new electronics on your credit cards during your loan process. Because lending institutions are perusing your bank accounts, a large cash purchase is also a mistake.

Don't go on a job search. Stability in your work history is a good thing to banks and other lenders. Getting a new job may not compromise your ability to qualify for a loan - especially if you are getting a better salary. But for some, changing jobs during the mortgage loan application process might bring concern and stymie your application.

Don't change banks or move cash around in your accounts. Your lender will ask for recent bank statements on accounts in your name: savings, checking, money market, and other assets. To detect potential fraud, most loans need thorough paperwork to verify the source of all funds. Switching banks or transferring money to another account - even if its only to pool funds - could hinder the documentation of your funds.

Don't give funds directly to your seller (generally in the case of of "for sale by owner") to be considered a "good faith" deposit. Until the sale is complete, the good faith money actually belongs to you. Some sellers may not know that any good faith money is to be applied to your expenses at closing. Find a lawyer or other neutral person who can hold the money or place it in a trust account until you close. The disposition of earnest funds, if your home purchase fails, should be indicated in the purchase agreement with your seller.

Riviera Funding NMLS#861382 CA DRE Broker #01186669 can walk you through the pitfalls of getting a mortgage. Call us at 3103737406.