What to Avoid During a Home Purchase

Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the lender approves their loan. There still remain a few major hurdles to jump before your loan closes. Here are some actions to avoid during the home buying process to be sure the transaction goes smoothly.

Don't throw your money around. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until closing. Your lender may send up red flags if you buy new furniture on your credit cards during your loan process. Since lending institutions are perusing your bank accounts, a large cash purchase is also a bad idea.

Don't get a new job. Consistency in your job history is a positive thing to banks and other lenders. Finding a new job (especially one with a better salary) may not hinder your ability to qualify for your loan. However, if you switch careers before you qualify, your loan process could fail or be stalled.

Don't take your accounts to a new bank or move around your money. Bank statements from the last two or three months for your accounts (savings, checking, money market, and other assets) will likely be reviewed as the lending institution makes decisions regarding your mortgage application. In order to avoid fraud, lenders look for a consistent portrayal of how you earn your living and where any additional money comes from. No matter the purpose, changing banks or transferring money can raise a red flag with your lender and slow your loan process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. As a rule, your earnest money is yours, not the seller's until the deal closes. The good faith money is to be used for your expenses upon closing; some sellers may not know this. An attorney or other type of neutral party can hang onto your earnest money, or you may put it temporarily into a trust account until you close. The disposition of good faith money, if your sale falls through, should be specified in the purchase agreement with your seller.

F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org) can walk you through the pitfalls of getting a mortgage. Call us: 214-300-8756.

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