Things to Avoid While Buying a New Home

What's more fun than getting a bunch of new stuff to adorn your future home? Not much. But making big purchases before closing could be trouble. There are still a few major hurdles to jump before your loan closes. Here are some things to refrain from during the home buying process to assure the transaction goes well.

Don't overspend on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but stay away from big purchases like furniture, cars, appliances, or vacations until your loan closes. Using credit cards to buy furniture could jeopardize your loan process by changing your numbers dramatically. Using cash to purchase expensive items can also create a mistake: most lending institutions look at your cash reserve when approving your mortgage.

Don't go on a job search. Stability in your job history is a positive thing to lenders. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are improving your salary. However, if you switch careers before you qualify, your process could fail or be bogged down.

Don't move money around or change banks. Most lenders will ask for recent bank statements for all of your accounts: savings, checking, money market, and other liquid assets. In order to avoid fraud, lenders require a consistent portrayal of how you earn your money and where any additional wealth comes from. Even for practical reasons, moving around funds or changing banks could make it harder for your lending institution to verify your bank history.

Don't give cash directly to your seller (usually in the case of of "for sale by owner") to be considered earnest money. Until closing, any earnest money actually belongs to you. The earnest funds are to go toward your expenses closing; some sellers may not realize this. Get an attorney or other neutral party who can hold the deposit or place it in a trust account until closing. The contract should indicate who keeps the earnest funds if the home purchase fails.

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