What to Avoid During your Home Purchase

With the thrill 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 are still some hoops to jump through. Here are some things to stay clear of during the home buying process to be sure the transaction goes well.

Don't empty your wallet on big-ticket items You may be itching to order that new sofa for the soon-to-be-yours parlor, but it's best to stay away from making major purchases like furniture, appliances, jewelry, or vacations until closing. Your lender may send up red flags if you purchase your electronics on your credit cards in the middle of your loan process. It's even a red flag to make those large purchases with cash. Lending Institutions are examining your cash on hand when considering your loan.

Don't look for a new career. Stability in your career history is a positive thing to lending institutions. Finding a new career (particularly one with a better paycheck) may not hinder your ability to qualify for your loan. But in some cases, changing careers during the mortgage application process could bring concern and affect your approval.

Don't switch your accounts to a new bank or move around your cash. Bank statements from recent months for accounts in your name (checking, savings, money market, and other assets) will probably be analyzed as the lending institution makes decisions regarding your mortgage application. To avoid potential fraud, most lenders need thorough paperwork to document the source of all cash. Switching banks or transferring money elsewhere - for whatever reason - could hinder the documentation of your accounts.

Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it is actually yours until the sale closes. Any good faith money is to go toward your expenses closing; some sellers might not understand this. Find an attorney or other neutral person who can hold the deposit or place it in a trust account until you close. The purchase contract should dictate who keeps the earnest funds if the home purchase falls through.

At Executive Lending Group, we answer questions about this process every day. Call us at 4056158543.