What to Avoid During your Home Purchase

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. Keep in mind that until you get the keys, your lender is watching you very closely. We have given you a list of actions below we suggest you stay away from when waiting for closing.

Don't empty your wallet on big-ticket items It may be tempting to buy that new easy-chair for the soon-to-be-yours parlor, but it's advisable to stay away from making large buys like furniture, appliances, electronic equipment, or vacations until your home loan closes. Financing new bedroom 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 purchase big-ticket items can even be an issue: most banks look at your cash on hand when approving your loan.

Don't get a new job. Lenders like to see a consistent career history on your paperwork. Finding a new career (particularly one with a bigger salary) may not jeopardize your ability to qualify for a loan. However, if you switch careers before you qualify, your loan process could fail or be bogged down.

Don't change banks or move cash around in your accounts. Bank statements from recent months for your accounts (checking, savings, money market, and others) will probably be studied as the lending institution makes decisions regarding your mortgage application. To eliminate potential fraud, most loans need thorough paperwork to determine the source of all cash. Switching banks or moving finances elsewhere - no matter the reason - may hinder the review of your funds.

Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. As a rule, your earnest money is yours, not the seller's until the sale is final. Any earnest money is to go toward your expenses closing; the FSBO seller may not know this. It's wise to put the money into a trust account, or get an attorney to hold it until the deal closes. If your home purchase fails, your purchase agreement should indicate where the good faith deposit should go.

At Stepping Stone Mortgage, we answer questions about this process every day. Call us at (541) 683-3300.

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