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 taking their excitement straight to the mall or appliance store. Until the house is really yours, there still remain some hoops to jump through. We have given you a list of actions below you will want to avoid when waiting for your loan to close.

Don't empty your wallet on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but stay away from expensive purchases like furniture, electronics, appliances, or vacations until your loan closes. Your credit numbers could change suddenly if you make a huge purchase using plastic. Since lending institutions are looking closely at your financial accounts, a large cash purchase is also a bad idea.

Don't go on a career hunt. Stability in your job history is a good thing to banks and other lenders. Getting a new job may not affect your ability to qualify for a loan - particularly if you are improving your salary. However, switching jobs in the middle of your approval process could influence whether or not you are approved.

Don't take your accounts to a new bank or move around your cash. Bank statements from the last few months for accounts in your name (checking, savings, money market, and other accounts) will probably be analyzed as the lender considers your approval. To eliminate potential fraud, most lending institutions need thorough paperwork to determine the source of all funds. Switching banks or moving funds elsewhere - even if its only to consolidate funds - might hinder the documentation of your accounts.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. As a rule, your good faith money belongs to you, not the seller until closing. Your FSBO seller may not realize that any good faith funds must be used for your expenses at closing. A neutral party, like an attorney can hold onto your deposit, or you may put it temporarily into a trust account until closing. The purchase agreement should document who keeps the money if the transaction fails.