Things to Avoid While Buying a Home

What's more fun than buying a bunch of new furnishings to adorn your future home? Not much. But buying big ticket items before your loan closes could be trouble. Until your loan closes, there are still some hurdles to jump. Below you'll find a list of actions to avoid during this critical time of your home purchase.

Don't throw your money around. It may be tempting to buy that new Turkish rug for the soon-to-be-yours den, but it's best to stay away from making big ticket purchases like furniture, appliances, jewelry, or vacations until your home loan closes. Your lender may send up red flags if you buy new appliances on your credit cards in the middle of your loan process. It's also a bad idea to make those big purchases using cash. Lending Institutions are examining your available cash when considering your loan.

Don't look for a new career. Your recent work history should show consistency. Finding a new career (especially one with a better paycheck) may not affect your ability to qualify for a mortgage loan. However, if you switch careers before approval, your mortgage process could fail or be stalled.

Don't move finances around or switch banks. Your lender will ask for recent bank statements for all of your accounts: checking, savings, money market, and other assets. To detect potential fraud, most lending institutions require detailed paperwork to determine the source of all funds. Even for innocent purposes, moving around money or changing banks could make it harder for the lender to verify your account history.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until the sale is complete, the good faith money remains yours. Although your FSBO seller may not know this, your good faith funds must go toward the buyer's closing expenses. We recommend that you put the money into a trust account, or get a neutral party, like a lawyer, to hold it until the closing of the sale. Your purchase agreement should document to whom the money goes if the transaction falls through.

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

Got a Question?

Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.

Your Information
Your Question

Norcal Capital Group, Inc

1369 El Camino Real
Millbrae, CA 94030