Buying a Home

Many new homebuyers make the mistake of rushing out to buy the items they will need to fill their home as soon as the seller accepts their purchase offer and the lender pre-approves their home loan. There are still major hurdles to overcome before you become fully approved for your home purchase and final mortgage approval. Some things to avoid during the home buying process to assure your transaction goes as smoothly as possible:

• Dont make an expensive purchase. It may be tempting to order new furniture for your home, but its best to avoid making major purchases like furniture, cars, appliances, electronic equipment, jewelry, or vacations until after the mortgage loan closing. Financing furniture with a store credit card or even one of your own credit cards could jeopardize your credit score and your debt ratio. You may still get approved for your loan but under a program that may require a higher interest rate or larger down payment. Using cash to purchase big items can also create a problem because many banks take into consideration what your cash reserves with be after your mortgage closes.
• Dont get a new job. Lenders like to see a consistent job history. Changing jobs may affect your ability to qualify for a mortgage loan. Discuss any changes in your employment early with your loan officer. 
• Dont switch banks or move money around. As the underwritter reviews your loan package, you will likely be asked to provide bank statements for the last two or three months, the balances on your bank statements maybe verified and the balances should match what you submitted. To eliminate potential fraud loans require a thorough paper trail to document the source of all funds. Changing banks or transferring money to another account could make it difficult for the lender to document your funds.
• Don't give a good faith deposit directly to the seller in a FSBO purchase. As a rule, your good faith deposit belongs to you, not to the seller, until the deal closes. Your FSBO seller may not know that your good faith funds should be applied to your expenses at closing. Get an attorney or other neutral party who can hold the deposit or put it in a trust account until you close on the home. Your purchase contract should dictate to whom the funds go should the transaction fall through.
• Dont disregard your lenders requirements. You may have been pre-approved for the loan but your work with the lender is far from over. In order to process your loan, you need to meet certain requirements. Your lender will need copies of your bank statements, W2s and other paperwork. It is up to you to get it to him or her as soon as possible. Failure to submit certain qualifying documents could cause you to lose your loan and the financing you need to buy your home.