What to Avoid During your Home Purchase

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. There still remain a few major hurdles to jump before your loan closes. We have listed some things below you will want to avoid when waiting for your loan to close.

Don't buy luxury items. Although you may be listing ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until the closing of your loan. Your lender may send up red flags if you buy new electronics on your credit cards during your loan process. It's even a bad idea to make those big purchases using cash. Lenders are looking at your available cash when considering your loan.

Don't go on a job search. Lenders look for a consistent work history on your application forms. Getting a new career before you start the application process for a loan may not compromise your approval at all. However, switching careers in the middle of your approval process could influence your approval.

Don't switch banks or move cash around in your accounts. Your lending institution will require you to produce recent bank statements for all of your accounts: savings, checking, money market, and other liquid assets. Your lender looks for a consistent rise and fall of your money each month, in order to rule out fraud. Even for innocent purposes, moving around cash or changing banks might make it harder for the lending institution to document your account history.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until the sale is complete, the good faith deposit remains yours. Any good faith money is to go toward your expenses upon closing; some individual sellers might not understand this. It's wise to put the funds into a trust account, or get an attorney to hold them until the deal closes. Should your home purchase fail, your purchase contract should document where this earnest money should go.

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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