Things to Avoid While Buying a Home

With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. Until closing, there still remain some hurdles to jump. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.

Don't empty your wallet on big-ticket items You may be tempted to buy that new couch for the soon-to-be-yours parlor, but it's best to avoid making big ticket buys like furniture, appliances, jewelry, or cars until closing. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Using cash to purchase big-ticket items can even create a mistake: most lenders take into consideration your available cash when approving your loan.

Don't look for a new job. Your recent career history should show stability. Finding a new career (especially one with a better salary) may not affect your ability to qualify for your mortgage loan. However, getting a new career during the loan process could influence your approval.

Don't switch your accounts to a new bank or move around your money. While the lending institution reviews your loan application, you will probably be asked to produce bank statements for recent months on your saving and checking accounts, money market funds and other liquid finances. To avoid potential fraud, most loans want a thorough paper trail to document the source of all incoming funds. Even for practical purposes, moving around cash or changing banks could make it more difficult for the lender to verify your account history.

Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money is yours, not the seller's until closing. Although your seller might not know this, your good faith funds should go toward your closing expenses. It's best to put the funds into a trust account, or get an attorney to hold them until the closing of the sale. Should your sale fall through, the contract with the seller should dictate to whom your earnest money should go.

Norcal Capital Group, Inc can answer questions about these "Don'ts" and many others. Give us a call: 6507631924.