What to Avoid During a Home Purchase

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Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the lender approves the loan. Until your loan closes, there still remain some hoops to jump through. We have listed some things below you will want to stay away from when waiting for closing.

Don't buy big-ticket items. You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but stay away from big purchases like furniture, cars, appliances, or vacations until closing. Your lender may send up red flags if you finance new appliances on your credit cards during your loan process. Because lenders are perusing your bank accounts, a large cash purchase is also a mistake.

Don't go on a career search. Lending Institutions like to see a consistent job history on your application. Finding a new job (especially one with a bump in salary) may not affect your ability to qualify for your mortgage. However, switching jobs in the middle of your loan process may influence whether or not you are approved.

Don't take your accounts to a new bank or move around your money. As the lending institution considers your loan application, you will likely be required to produce bank statements for the last two or three months on your checking and savings accounts, money market funds and other liquid finances. To detect potential fraud, most lenders need a detailed paper trail to determine the source of all funds. Switching banks or moving finances to another account - no matter the purpose - may hinder the documentation of your accounts.

Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith money does not belong to the seller: it is actually yours until the sale closes. Although your FSBO seller may not know this, your good faith funds must be used for the buyer's closing expenses. An attorney or other type of neutral party can hold onto your earnest money, or you may put it temporarily into a trust account until you close. Should your home purchase fail, the purchase agreement should specify to whom your earnest money should go.

Reliant Mortgage Ltd can answer questions about these "Don'ts" and many others. Call us at (214) 545-5700.