What to Avoid During a Home Purchase

With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. Keep in mind that until you get the keys, your lender is watching your finances very closely. We have given you a list of actions below we suggest you stay away from when waiting for your loan to close.

Don't empty your wallet on big-ticket items Although you will be dreaming of ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to stay away from vacations and vehicle purchases until the closing of your loan. Financing your bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. It's even a red flag to make those large purchases using cash. Lending Institutions are examining your cash on hand when considering your loan.

Don't get a new job. Lending Institutions look for a consistent work history on your application forms. Changing jobs may not compromise your ability to qualify for a loan - particularly if you are improving your salary. But for some people, getting a new job during the mortgage approval process might bring concern and hinder your application.

Don't switch your accounts to a new bank or move around your finances. Most lenders will ask for recent bank statements for accounts in your name: checking, savings, money market, and other liquid assets. Your lender is looking for a consistent rise and fall of your money each month, in order to avoid fraud. No matter the reason, changing banks or moving funds from one account to another may raise a red flag with your lender and slow down your qualification process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Until the sale is complete, the good faith money remains yours. Although your seller might not realize this, your earnest money must be used for your closing expenses. You'll need to put the money into a trust account, or get an attorney to hold it until the deal closes. The contract should dictate who keeps the money if the transaction falls through.

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