What to Avoid During your Home Purchase

Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the loan is approved. Until the house is really yours, there still remain some hoops to jump through. Below you'll find a list of actions to avoid during this critical time of your home purchase.

Don't overspend on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from major purchases like furniture, jewelry, appliances, or vacations until closing. Using credit cards to buy furniture could compromise your loan process by distorting your numbers. It's even a mistake to make those huge purchases with cash. Lending Institutions are examining your available cash when considering your loan.

Don't get a new job. Your recent career history should show consistency. Getting a new career before you apply for a loan may not compromise your approval at all. But for some, changing jobs during the mortgage loan application process may raise concern and affect your approval.

Don't switch banks or move finances around in your accounts. Bank statements from recent months for accounts in your name (checking, savings, money market, and other accounts) will be studied as the lending institution considers your approval. The lender looks for a consistent flow of your money each pay period, in the interest of avoiding fraud. No matter the purpose, changing banks or moving money from one account to another can raise a red flag with your lender and slow your loan process.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until closing, the good faith deposit actually belongs to you. Although your FSBO seller might not know this, your good faith funds should be applied to your closing expenses. A neutral party, like an attorney can hold your funds, or you may put them temporarily into a trust account until closing. The disposition of earnest money, if your transaction fails, should be documented in the contract with the seller.

Integrated Financial Solutions, LLC can answer questions about these "Don'ts" and many others. Call us at 4104614043.