Things to Avoid While Purchasing a New Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. It's wise to remember that until closing, your lender is watching you very closely. Below you'll find a list of actions to stay away from during this critical time of your home purchase.

Don't empty your wallet on big-ticket items Although you will be planning ways to turn your new house into a showplace, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and car purchases until the closing of your loan. Using plastic to buy furniture could jeopardize your loan process by distorting your numbers. Because lending institutions are examining your bank accounts, a large cash purchase is also a bad idea.

Don't go on a career search. Your recent career history should show consistency. Getting a new job before you apply for a loan may not jeopardize your approval at all. However, getting a new career in the middle of the approval process might affect your approval.

Don't move money around or change banks. Bank statements from the last few months for your accounts (savings, checking, money market, and other accounts) will be reviewed as the lender makes decisions regarding your mortgage application. Your lending institution needs to see a consistent rise and fall of your funds over the month, in the interest of ruling out fraud. Even for innocent reasons, transferring cash or switching banks could make it difficult for the lender to verify your account history.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, the good faith money actually belongs to you. Although your FSBO seller may not understand this, any earnest money should go toward your closing expenses. You'll want to put the funds into a trust account, or get an attorney to hold them until the closing of the sale. The disposition of good faith funds, if your home purchase falls through, should be included in the purchase agreement with your seller.

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