What to Avoid During a Home Purchase

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In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. There are still a few major hurdles to jump before the keys are handed over. Here are some actions to avoid before closing to assure the transaction goes smoothly.

Don't throw your money around. You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but keep away from big purchases like furniture, cars, appliances, or vacations until closing. Financing your furniture 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 buy expensive items can even create a mistake: many lenders take into consideration your cash on hand when approving your mortgage loan.

Don't get a new job. Lenders feel comfortable seeing a consistent job history on your application. Changing jobs may not affect your ability to qualify for a mortgage loan - particularly if you are improving your salary. However, if you switch careers before your loan is approved, your mortgage process could fail or be stalled.

Don't move finances around or change banks. Most lenders will ask for recent bank statements for your accounts: savings, checking, money market, and other liquid assets. In order to avoid fraud, lenders want to see a consistent portrayal of how you earn your living and where any additional money comes from. Even for practical reasons, moving around money or changing banks could make it more difficult for the lender to document your bank history.

Don't give money directly to your seller (generally in cases of "for sale by owner") to be considered a "good faith" deposit. Until the completion of the deal, any good faith deposit actually belongs to you. Your seller might not know that these good faith funds should go toward your expenses at closing. Get a lawyer or other neutral person who can hold the funds or place them in a trust account until you close. The disposition of good faith funds, in the case of a failed transaction, should be specified in the purchase agreement with your seller.

BLUESTONE CAPITAL GROUP can walk you through the pitfalls of getting a mortgage. Call us: 678-992-2675.