What to Avoid During your Home Purchase

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. Keep in mind that until closing, your lender is watching your finances very closely. We have given you a list of actions below you will want to avoid when waiting for closing.

Don't throw your money around. 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 large buys like furniture, appliances, electronic equipment, or cars until closing. Financing new bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. It's even a mistake to make those huge purchases with cash. Lending Institutions are examining your cash reserve when considering your loan.

Don't go on a career search. Lenders feel comfortable seeing a consistent job history on your application forms. Finding a new job (particularly one with a better salary) may not change your ability to qualify for your loan. But for some, changing careers during the loan application process may bring concern and stymie your application.

Don't switch banks or move money around in your accounts. While your lender reviews your mortgage application, you will probably be required to submit bank statements for the last two or three months on your checking and savings accounts, money market accounts and other liquid finances. To eliminate potential fraud, most lenders require a thorough paper trail to document the source of all cash. Switching banks or transferring funds to another account - even if its just to consolidate funds - could make it harder for your lender to document your funds.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. As a rule, your good faith deposit is yours, not the seller's until the deal closes. Some sellers may not know that any good faith funds is to go toward your expenses upon closing. Find an attorney or other neutral person who can hold the money or place it in a trust account until you close. The final disposition of good faith funds, in the case of a failed transaction, should be included in the purchase agreement with your seller.

At Boardwalk Mortgage, we answer questions about this process every day. Give us a call: 1-800-606-2794.