Things to Avoid While Buying a New Home

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Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the lender approves their loan. It's wise to remember that until your keys are in hand, your lender is watching your accounts very closely. We have listed some things below we suggest you avoid when waiting for closing.

Don't buy big-ticket items. Although you may be planning ways to turn your new house into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until your loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. Using cash to purchase big-ticket items can also create an issue: most banks consider your cash on hand when approving your mortgage loan.

Don't look for a new job. Stability in your job history is a good thing to lenders. Getting a new career before you apply for a mortgage loan may not compromise your approval at all. But in some cases, getting a new job during the mortgage loan application process might raise concern and hinder your application.

Don't move finances around or change banks. Your lending institution will instruct the submission of recent bank statements for your accounts: savings, checking, money market, and other liquid assets. The lending institution looks for a steady rise and fall of your funds over the month, in order to rule out fraud. No matter the purpose, switching banks or moving money from one account to another can raise a red flag with your lender and slow your loan process.

Don't give cash directly to your seller (generally in cases of "for sale by owner") for a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's up until the sale is final. The earnest money is to be applied to your expenses closing; some FSBO sellers may not know this. Get an attorney or other neutral person who will hang on to the money or place it in a trust account until closing. The final disposition of good faith funds, in the case of a failed transaction, should be specified in the purchase agreement with the seller.

Sunrise Mortgage Group can answer questions about these "Don'ts" and many others. Give us a call at -.