Things to Avoid While Purchasing a Home

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Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the loan is approved. Until your keys are in hand, there are still some hurdles to jump. Below you'll find a list of actions to avoid during this crucial time of your home purchase.

Don't buy big-ticket items. You may be itching to order that new sofa for the soon-to-be-yours parlor, but it's best to stay away from making big ticket buys like furniture, appliances, electronic equipment, or cars until your home loan closes. Using credit cards to buy furniture could compromise your loan process by altering your numbers dramatically. Because lending institutions are examining your financial accounts, a large cash purchase is also not advised.

Don't look for a new career. Consistency in your career history is a positive thing to lenders. Changing jobs may not compromise your ability to qualify for a mortgage loan - particularly if you are improving your salary. But in some cases, getting a new career during the loan application process could bring concern and affect your application.

Don't move finances around or switch banks. While your lender reviews your mortgage loan application, you will probably be asked to submit bank statements for the last two or three months on your checking accounts, savings accounts, money market accounts and other liquid finances. The lender is looking for a steady rise and fall of your funds over the month, in order to rule out fraud. Even for practical reasons, transferring finances or changing banks might make it more difficult for the lending institution to document your account history.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Some FSBO sellers might not realize that these good faith funds must go toward your expenses upon closing. We recommend that you put the funds into a trust account, or get an attorney to hold them until the deal closes. Your contract should dictate who keeps the deposit if the home purchase does not go through.

At Mortgage Office of Nevin L. Miller, we answer questions about this process every day. Give us a call at 415-453-7300.