What to Avoid During your Home Purchase

With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. Keep in mind that until you get the keys, your lender is watching you very closely. We have listed some things below you will want to avoid when waiting for your loan to close.

Don't buy big-ticket items. Although you will 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 vehicle purchases until your loan closes. You may send up red flags with your lender if you buy new appliances on your credit cards in the middle of your loan process. Using cash to purchase big-ticket items can also be a bad idea: most lending institutions look at your cash on hand when approving your mortgage.

Don't get a new job. Your recent career history should show consistency. Getting a new career before you start the application process for a mortgage loan may not get in the way of your approval at all. However, switching jobs during your application process may affect whether or not you are approved.

Don't switch banks or move finances around in your accounts. Your lender will require you to produce recent bank statements on accounts in your name: checking, savings, money market, and other liquid assets. Your lender will need to see a steady rise and fall of your money over the pay period, in order to avoid fraud. Even for practical reasons, transferring funds or switching banks may make it more difficult for your lending institution to verify your bank history.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. As a rule, your good faith money is yours, not the seller's up until the sale is final. Although some FSBO sellers might not realize this, any earnest money must go toward your closing expenses. Find a lawyer or other neutral party who is able to hang on to the funds or put them in a trust account until you close. The final disposition of good faith money, in the case of a failed transaction, should be documented in the purchase agreement with the seller.

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