Things to Avoid While Buying a Home

Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the loan is approved. It's best to remember that until your keys are in hand, your lender is watching you very closely. Below you'll find a list of things to avoid during this crucial time of your home purchase.

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 the loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. It's even a bad idea to make those huge purchases using cash. Lending Institutions are examining your cash on hand when considering your loan.

Don't go on a job search. Your recent job history should show stability. Finding a new job (especially one with a bigger salary) may not jeopardize your ability to qualify for a loan. But for some people, changing careers during the loan approval process might bring concern and stymie your application.

Don't switch banks or move money around in your bank accounts. Bank statements from recent months for accounts in your name (checking, savings, money market, and other assets) will likely be studied as the lending institution considers your application. Your lender needs to see a consistent rise and fall of your money each month, in order to avoid fraud. Even for innocent purposes, moving around funds or changing banks may make it harder for your lending institution to document your bank history.

Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, the good faith deposit actually belongs to you. The earnest funds are to be used for your expenses closing; some FSBO sellers might not realize this. You'll need to put the deposit into a trust account, or get an attorney to hold it until the deal closes. If your sale falls through, your contract with the seller should specify where the earnest money should go.

At Family Mortgage Company of Hawaii, Inc. NMLS #244497, we answer questions about this process every day. Give us a call: (808) 935-0678.

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