Things to avoid before buying a home

Many homebuyers make a common mistake of rushing out and buying items to fill their home when the seller accepts their purchase offer or the lender pre-approves their loan. But there are still a more issues to overcome before the keys are provided to you.

Here are some issues to avoid during the home buying process to ensure your mortgage loan process goes as smoothly as possible:

• Don't make expensive purchases. You may want to purchase new furniture for your new living room, howevert it is best not to make major purchases like furniture, cars, appliances, electronics, jewelry, or vacations until you have closed on the house. Financing furniture with a new store credit card or even one of your currently own could change your credit score during the time it means the most. Using cash to buy big items can also create problems because many banks take into consideration your cash reserves when approving your mortgage.

• Don't get a new job. Lenders like to see a consistency in you job history. Changing jobs will not affect your ability to qualify for a mortgage loan - especially if you are going to be making more money. But for some people, changing to a new job during the loan approval process could raise  concerns and affect your application. 

• Don't switch banks or move money around.    When your lender reviews your loan package, you may likely be asked to provide bank statements for the last two or three months on your checking accounts, savings accounts, money market funds and other assets. To stop potential fraud, most loans require a thorough paper trail to show the source of all required funds. By changing banks or transferring money to another account - even if its just to consolidate funds - it could make it more difficult for the lender to investigate your funds.

• Don't give a good faith deposit directly to the seller in a FSBO purchase.                            Your good faith deposit belongs to you, not to the seller, until the loan process closes. Your FSBO seller may not understand that your good faith funds are tod be applied to your expenses at closing. Ensure you have an attorney or Title company or other certified neutral party to hold the deposit or put it in a trust (escrow) account until you close on the home. Your real estate purchase contract should dictate wher the funds go should the loan close.

• Don't disregard your lenders requirements.   Remember you may have been pre-approved for the loan but you must still work with the lender to provide more information when necessary. In order to process your loan, you will need to meet specific requirements. Your lender will need copies of your bank statements, W2s and other relevant paperwork. It is your responsibilety to get it to him or her as soon as possible. Failure to submit specific qualifying documents on a timely basis could cause you to lose your loan and the financing you need to purchase your home.