Things to Avoid While Buying a Home

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With the thrill 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. Until closing, there are still some hoops to jump through. Below you'll find a list of actions to avoid during this crucial time of your home purchase.

Don't buy luxury items. Although you may be listing ways to turn your new home into a showplace, try to stay away from major purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and car purchases until the closing of your loan. Your lender may send up red flags if you finance new appliances on your credit cards in the middle of your loan process. It's even a mistake to make those big purchases with cash. Lending Institutions are looking at your cash reserve when considering your loan.

Don't look for a new job. Your recent work history should show consistency. Finding a new career (particularly one with a better salary) may not hinder your ability to qualify for a loan. But for some, changing jobs during the mortgage approval process may raise concern and hinder your application.

Don't take your accounts to a new bank or move around your money. Most lenders will require you to submit recent bank statements of your accounts: checking, savings, money market, and other assets. The lending institution is looking for a steady flow of your funds over the month, in the interest of ruling out fraud. Even for practical reasons, moving around cash or switching banks may make it difficult for the lending institution to confirm your bank history.

Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money belongs to you, not the seller up until the deal closes. A FSBO seller may not realize that the good faith money must go toward your expenses at closing. You'll want to put the funds into a trust account, or get an attorney to hold them until the deal closes. The disposition of good faith funds, in the case of a failed transaction, should be written in the purchase agreement with your seller.

At Western Reliance Funding Group, Inc., we answer questions about this process every day. Call us: 800.465.1404.1002.