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 error of taking their enthusiasm straight to the mall or appliance store. There are still a few major hurdles to jump before your loan closes. Here are some actions to stay clear of during the home buying process to assure the transaction goes smoothly.

Don't buy luxury items. Although you may be planning ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you keep away from vacations and vehicle purchases until your loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. Because lending institutions are perusing your bank accounts, a large cash purchase is also a mistake.

Don't go on a job search. Consistency in your job history is a good thing to banks and other lenders. Getting a new job before you apply for a mortgage may not jeopardize your approval at all. However, switching jobs in the middle of your approval process may influence your approval.

Don't take your accounts to a new bank or move around your money. Your lending institution will require you to submit recent bank statements for accounts in your name: checking, savings, money market, and other assets. To avoid fraud, lenders require a clear and consistent picture of how you earn your living and where additional wealth comes from. No matter the reason, switching banks or moving funds from one account to another can raise a red flag with your lender and slow down your loan process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Your earnest money does not belong to the seller: it is actually yours until the sale closes. Your seller may not know that the good faith funds should be used for your expenses upon closing. Find an attorney or other neutral party who can hold the funds or put them in a trust account until you close. Should your home purchase fail, the contract with the seller should specify where your good faith deposit should go.

At F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org), we answer questions about this process every day. Give us a call at 214-300-8756.



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