What to Avoid During your Home Purchase

Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the lender approves the loan. It's best to remember that until your keys are in hand, your lender is watching you very closely. We have given you a list of things below you will want to avoid when waiting for closing.

Don't buy luxury items. It may be tempting to buy that new sofa for the soon-to-be-yours parlor, but it's advisable to avoid making large buys like furniture, appliances, electronic equipment, or vacations until closing. Using plastic to buy new living room furniture could compromise your loan process by changing your numbers dramatically. Using cash to buy big items can also create a mistake: many banks look at your available cash when approving your mortgage loan.

Don't go on a career search. Your recent job history should show stability. Changing jobs may not compromise your ability to qualify for a mortgage loan - especially if you are getting a better salary. But for some people, getting a new career during the mortgage loan application process might raise concern and affect your application.

Don't move cash around or change banks. Your lending institution will instruct the submission of recent bank statements on accounts in your name: savings, checking, money market, and other assets. To detect potential fraud, most lending institutions want detailed paperwork to determine the source of all funds. No matter the reason, changing banks or transferring money could raise a red flag with your lender and slow your approval process.

Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it is actually yours until closing. Any good faith money is to go toward your expenses upon closing; some individual sellers may not know this. We recommend that you put the money into a trust account, or get an attorney to hold it until the closing of the sale. If your home purchase fails, your purchase contract should specify to whom this earnest money should go.

Foxfield Financial can walk you through the pitfalls of getting a mortgage. Give us a call: 7205988300.