Things to Avoid While Buying a New Home

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Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the loan is approved. There still remain a few major hurdles to jump before the keys are handed over. We have given you a list of actions below you will want to avoid when waiting for your loan to close.

Don't empty your wallet on big-ticket items Although you will be planning ways to turn your new house into a showplace, try to stay away from big ticket purchases like appliances, electronics, or furniture. We also recommend that you keep away from vacations and car purchases until your loan closes. Using plastic to buy furniture could compromise your loan process by distorting your numbers. Because lenders are looking closely at your financial accounts, a large cash purchase is also a bad idea.

Don't go on a job search. Lending Institutions like to see a consistent career history on your application. Finding a new career (especially one with a better paycheck) may not jeopardize your ability to qualify for a loan. But in some cases, getting a new job during the mortgage loan application process may bring concern and affect your application.

Don't switch banks or move finances around in your accounts. Most lenders will require you to submit recent bank statements for your accounts: checking, savings, money market, and other assets. In order to eliminate fraud, lenders require clear documentation of how you earn your living and where additional money comes from. Switching banks or transferring funds to another account - no matter the reason - may hinder the review of your accounts.

Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money belongs to you, not to the seller up until the deal closes. Although some individual sellers might not realize this, your good faith funds should be applied to your closing expenses. An attorney or other type of neutral party can hold onto your earnest funds, or you may place them temporarily into a trust account until closing. The final disposition of good faith money, if your home purchase fails, should be included in the contract with your seller.

Sierra View Financial Corp can answer questions about these "Don'ts" and many others. Call us: 916-989-6222.