Things to Avoid While Buying a Home

Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the loan is approved. Until your keys are in hand, there still remain some hurdles to jump. Here are some actions to avoid during the home buying process to be sure your transaction goes smoothly.

Don't make expensive purchases. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but keep away from big purchases like furniture, cars, appliances, or vacations until your loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. It's also a mistake to make those large purchases using cash. Lending Institutions are examining your cash reserve when considering your loan.

Don't look for a new job. Lending Institutions feel comfortable seeing a consistent career history on your application forms. Getting a new job before you apply for a mortgage may not get in the way of your approval at all. However, switching careers in the middle of the approval process might affect whether or not you are approved.

Don't move cash around or switch banks. Bank statements from the last few months for accounts in your name (savings, checking, money market, and other accounts) will be reviewed as the lending institution makes decisions regarding your loan application. To detect fraud, lenders need a clear and consistent picture of how you earn your money and where any additional funds come from. No matter the purpose, changing banks or transferring funds may raise a red flag with the lender and slow your application process.

Don't give cash directly to your seller (generally in cases of "for sale by owner") to be considered earnest money. Until the sale is complete, the good faith deposit remains yours. Some sellers might not realize that any good faith funds is to go toward your expenses upon closing. A neutral party, like an attorney can hang onto your earnest money, or you may put it temporarily into a trust account until closing. Should your sale fall through, your contract with the seller should indicate where your good faith funds should go.

At Acceptance Home Loans, we answer questions about this process every day. Give us a call at 817-878-4220.