What to Avoid During your Home Purchase

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. There are still a few major hurdles to jump before your loan closes. Here are some things to refrain from before closing to be sure the transaction goes well.

Don't buy luxury items. Although you will be planning ways to turn your new house into a castle, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and car purchases until your loan closes. You may send up red flags with your lender if you finance your electronics on your credit cards during your loan process. Because lending institutions are reviewing your bank accounts, a large cash purchase is also not advised.

Don't look for a new career. Your recent career history should show stability. Getting a new career before you apply for a mortgage may not jeopardize your approval at all. However, switching careers during the approval process may affect whether or not you are approved.

Don't move money around or switch banks. Most lenders will instruct the submission of recent bank statements on all of your accounts: savings, checking, money market, and other liquid assets. In order to avoid fraud, lenders want to see a consistent portrayal of how you earn your living and where any additional funds come from. No matter the reason, moving banks or moving funds from one account to another might raise a red flag with your lender and slow your loan process.

Don't give cash directly to your seller (usually in the case of of "for sale by owner") for earnest money. As a rule, your good faith deposit belongs to you, not the seller up until the deal closes. The good faith money is to be used for your expenses closing; a individual seller might not understand this. It's advisable to put the deposit into a trust account, or get an attorney to hold it until the deal closes. If your transaction fails, your purchase contract should document to whom this earnest money should go.

Integrated Financial Solutions, LLC can walk you through the pitfalls of getting a mortgage. Call us at 4104614043.