Things to Avoid While Buying a New Home

What's better than getting a bunch of new stuff to go in your future home? Not much. But making large purchases before your loan closes can be an error. Until the house is really yours, there still remain some hoops to jump through. Below you'll find a list of actions to stay away from during this critical time of your home purchase.

Don't buy luxury items. Although you will be planning ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or furniture. We also recommend that you stay away from vacations and car purchases until the closing of your loan. Financing your stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Using cash to purchase big-ticket items can even be a problem: most banks look at your cash on hand when approving your loan.

Don't get a new job. Stability in your job history is a good thing to lenders. Getting a new job before you start the application process for a mortgage may not affect your approval at all. However, if you switch careers before your loan is approved, your mortgage process could fail or be bogged down.

Don't take your accounts to a new bank or move around your cash. While your lending institution considers your mortgage loan application, you will likely be required to provide bank statements for the last two or three months on your checking accounts, savings accounts, money market accounts and other liquid wealth. In order to avoid fraud, lenders require clear documentation of how you earn your money and where additional money comes from. Switching banks or transferring money elsewhere - even if its only to consolidate funds - could make it difficult for your lender to review your funds.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not the seller until closing. Your FSBO seller may not realize that any earnest money must be used for your expenses upon closing. Get an attorney or other neutral party who can hold the deposit or put it in a trust account until closing. Your purchase agreement should specify where the funds go if the transaction falls through.

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