What to Avoid During your Home Purchase

Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the lender approves their loan. There are still a few major hurdles to jump before the house is realy yours. Below you'll find a list of actions to avoid during this crucial time of your home purchase.

Don't overspend on big-ticket items You may be itching to buy that new sofa for the soon-to-be-yours parlor, but it's advisable to stay away from making large buys like furniture, appliances, jewelry, or vacations until closing. Your lender may send up red flags if you finance new appliances on your credit cards during your loan process. It's also a red flag to make those large purchases using cash. Lending Institutions are looking at your cash reserve when considering your loan.

Don't look for a new career. Your recent career history should show stability. Finding a new career (particularly one with a better salary) may not jeopardize your ability to qualify for a loan. However, finding a new job during the loan process might influence your approval.

Don't switch banks or move finances around in your accounts. Bank statements from the last few months for accounts in your name (savings, checking, money market, and others) will be studied as the lending institution makes decisions regarding your mortgage application. To detect fraud, lenders look for a clear and consistent picture of how you earn your living and where additional money comes from. Switching banks or transferring funds to another account - even if its just to consolidate funds - may hinder the documentation of your funds.

Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, the earnest money remains yours. The earnest money is to be used for your expenses upon closing; some sellers might not realize this. We recommend that you put the money into a trust account, or get an attorney to hold it until the deal closes. The contract should dictate to whom the deposit goes if the transaction does not go through.

At Integrated Financial Solutions, LLC, we answer questions about this process every day. Give us a call at 4104614043.