What to Avoid During a Home Purchase

Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the loan is approved. There still remain a few major hurdles to jump before the house is realy yours. Here are some actions to avoid before closing to assure the transaction goes smoothly.

Don't make expensive purchases. Although you may be listing ways to turn your new home into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. We also recommend that you keep away from vacations and car purchases until your loan closes. You may send up red flags with your lender if you finance your furniture on your credit cards during your loan process. Since lenders are perusing your financial accounts, a large cash purchase is also a bad idea.

Don't go on a job search. Your recent job history should show consistency. Getting a new career before you start the application process for a mortgage may not affect your approval at all. However, getting a new career in the middle of your application process might influence whether or not you are approved.

Don't move money around or change banks. Bank statements from the last two or three months for all of your accounts (checking, savings, money market, and other accounts) will likely be analyzed as the lending institution considers your loan application. Your lender is looking for a steady rise and fall of your money over the pay period, in the interest of avoiding fraud. Even for practical purposes, moving around money or switching banks may make it more difficult for your lending institution to confirm your account history.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until closing, any good faith deposit actually belongs to you. Any earnest funds are to go toward your expenses closing; some sellers may not realize this. You'll need to put the deposit into a trust account, or get an attorney to hold it until the deal closes. The purchase agreement should dictate where the deposit goes if the home purchase fails.

F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org) can answer questions about these "Don'ts" and many others. Give us a call at 214-300-8756.

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