Things to Avoid While Buying a New Home

Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the lender approves the loan. Keep in mind that until closing, your lender is watching your accounts very closely. Below you'll find a list of things to stay away from during this crucial time of your home purchase.

Don't buy luxury items. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until your loan closes. Using credit cards to buy new living room furniture could compromise your lending process by changing your numbers dramatically. Since lenders are looking closely at your bank accounts, a large cash purchase is also not advised.

Don't get a new career. Lending Institutions like to see a consistent career history on your paperwork. Changing jobs may not compromise your ability to qualify for a loan - especially if you are getting a bigger paycheck. However, switching jobs in the middle of the application process could affect your approval.

Don't change banks or move money around in your accounts. As your lender reviews your mortgage loan application, you will likely be asked to provide bank statements for the last few months on your saving and checking accounts, money market funds and other liquid finances. In order to eliminate fraud, lenders will need a consistent portrayal of how you earn your living and where any additional funds come from. No matter the purpose, moving banks or transferring funds might raise a red flag with your lender and slow down your qualification process.

Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's up until closing. Your seller may not know that these good faith funds is to go toward your expenses at closing. Get a lawyer or other neutral person who is able to hang on to the funds or put them in a trust account until you close. The disposition of good faith money, if your transaction fails, should be specified in the purchase agreement with your seller.

Norcal Capital Group, Inc can answer questions about these "Don'ts" and many others. Call us 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