What to Avoid During your Home Purchase

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. Until the keys are handed over, there still remain some hurdles to jump. Below you'll find a list of things to stay away from during this critical time of your home purchase.

Don't overspend on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from big purchases like furniture, cars, appliances, or vacations until closing. Your lender may send up red flags if you purchase your appliances on your credit cards during your loan process. It's even a mistake to make those big-ticket purchases with cash. Lending Institutions are examining your cash reserve when considering your loan.

Don't get a new job. Stability in your career history is a positive thing to lending institutions. Getting a new job may not compromise your ability to qualify for a mortgage loan - particularly if you are getting a better salary. But for some people, switching jobs during the loan application process may raise concern and stymie your approval.

Don't switch your accounts to a new bank or move around your finances. Most lenders will ask for recent bank statements for all of your accounts: checking, savings, money market, and other assets. The lending institution hopes to see a steady flow of your money each month, in the interest of avoiding fraud. Switching banks or moving money elsewhere - no matter the purpose - might make it difficult for the lender to verify your funds.

Don't give money directly to your seller (generally in the case of of "for sale by owner") for earnest money. Until the sale is complete, the good faith deposit actually belongs to you. Some FSBO sellers may not know that your good faith money is to be applied to your expenses at closing. A neutral party, like an attorney can hang onto your funds, or you may place them temporarily into a trust account until closing. If your sale falls through, the purchase contract should document to whom the good faith deposit should go.

Riviera Funding NMLS#861382 CA DRE Broker #01186669 can answer questions about these "Don'ts" and many others. Call us at 3103737406.