Things to Avoid While Buying a Home

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What's better than getting a bunch of new furniture to go in your future home? Nothing. But making big ticket purchases before closing can be an error. There are still a few major hurdles to jump before closing. 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 order that new easy-chair for the soon-to-be-yours den, but it's advisable to stay away from making big ticket purchases like furniture, appliances, jewelry, or vacations until closing. Your lender may send up red flags if you purchase your appliances on your credit cards in the middle of your loan process. Because lending institutions are looking closely at your bank accounts, a large cash purchase is also not advised.

Don't get a new job. Your recent job history should show stability. Getting a new career before you start the application process for a mortgage may not get in the way of your approval at all. However, if you switch careers before you qualify, your loan process could fail or be bogged down.

Don't move cash around or change banks. Your lending institution will require you to produce recent bank statements of your accounts: checking, savings, money market, and other assets. To detect fraud, lenders will need clear documentation of how you earn your living and where additional wealth comes from. Even for practical purposes, transferring finances or changing bankcard services could make it more difficult for the lender to confirm your bank history.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Until the completion of the deal, any good faith money remains yours. Although your seller may not realize this, any good faith money must be applied to your closing expenses. Find an attorney or other neutral person who can hang on to the deposit or place it in a trust account until you close. The disposition of good faith funds, if your home purchase fails, should be written in the contract with the seller.

At Residential Mortgage Services, we answer questions about this process every day. Call us: 702-796-3453 x3055.