Things to Avoid While Buying a Home

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 lender approves their loan. It's wise to remember that until closing, your lender is watching your finances very closely. We have listed some things below we suggest you stay away from when waiting for closing.

Don't throw your money around. You may be itching to turn your new living room 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. Using credit cards to buy new living room furniture could compromise your lending process by distorting your numbers. Because lending institutions are examining your bank accounts, a large cash purchase is also a bad idea.

Don't get a new career. Consistency in your work history is a good thing to lending institutions. Getting a new career before you start the application process for a mortgage may not get in the way of your approval at all. But for some people, changing jobs during the loan approval process might raise concern and affect your approval.

Don't move finances around or change banks. Your lending institution will require you to provide recent bank statements on accounts in your name: savings, checking, money market, and other assets. The lending institution is looking for a steady flow of your money over the pay period, in the interest of avoiding fraud. Changing banks or moving funds elsewhere - for whatever reason - might make it harder for your lender to verify your funds.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until closing, any good faith deposit remains yours. Your seller might not know that any good faith funds must go toward your expenses upon closing. Get an attorney or other neutral person who will hang on to the funds or put them in a trust account until you close. The disposition of earnest funds, if your home purchase falls through, should be specified in the purchase agreement with the seller.

Norcal Capital Group, Inc can walk you through the pitfalls of getting a mortgage. Give us a call: 6507631924.