What to Avoid During your Home Purchase

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. Until closing, there still remain some hurdles to jump. Below you'll find a list of things to avoid during this critical time of your home purchase.

Don't throw your money around. Although you will be listing ways to turn your new house into a castle, try to stay away from big ticket purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until your loan closes. Financing your stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Since lenders are looking closely at your bank accounts, a large cash purchase is also not advised.

Don't go on a career search. Lending Institutions look for a consistent career history on your application. Getting a new job may not compromise your ability to qualify for a mortgage loan - particularly if you are going to be making more money. But for some, getting a new job during the mortgage application process might bring concern and stymie your approval.

Don't move cash around or change banks. Bank statements from the last few months for your accounts (checking, savings, money market, and other assets) will likely be analyzed as the lender makes decisions regarding your loan application. Your lender hopes to see a consistent rise and fall of your funds over the month, in order to avoid fraud. Even for practical purposes, transferring cash or changing banks might make it harder for your lending institution to verify your bank history.

Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's up until closing. Some FSBO sellers might not realize that the good faith funds must be applied to your expenses upon closing. A neutral party, like an attorney can hold your earnest funds, or you may place them temporarily into a trust account until closing. The purchase contract should dictate who gets the deposit if the transaction fails.

At New Millennium Mortgage Co. NMLS: 331173, we answer questions about this process every day. Give us a call: (941) 366-5800.