What Not to Do When Buying a New Home

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With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of bringing their enthusiasm straight to the mall or appliance store. Until closing, there still remain some hoops to jump through. Here are some actions to stay clear of during the home buying process to be sure the transaction goes smoothly.

Don't make expensive purchases. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but keep away from major purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. Using cash to buy big-ticket items can even create a mistake: many banks consider your available cash when approving your mortgage.

Don't go on a job hunt. Your recent career history should show stability. Changing jobs may not compromise your ability to qualify for a loan - especially if you are getting a bigger paycheck. However, finding a new career in the middle of your loan process could influence your approval.

Don't switch banks or move finances around in your accounts. Bank statements from the last few months for accounts in your name (savings, checking, money market, and others) will be studied as the lender considers your approval. To detect potential fraud, most lenders need a detailed paper trail to determine the source of all funds. Even for practical reasons, transferring finances or changing banks may make it more difficult for the lender to confirm your account history.

Don't give funds directly to your seller (generally in cases of "for sale by owner") for earnest money. As a rule, your good faith deposit is yours, not the seller's up until the deal closes. Some sellers might not know that this good faith money should go toward your expenses upon closing. We recommend that you put the funds into a trust account, or get an attorney to hold them until the deal closes. The disposition of earnest money, in the case of a failed transaction, should be specified in the purchase agreement with the seller.

Pacific Mortgage Consultants can walk you through the pitfalls of getting a mortgage. Give us a call at 530-677-2703.

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