Buying Don'ts
Below are some things to avoid when you are going through the home buying process so your experience is a smooth one:
Don't make expensive purchases.
Avoid major purchases such as furniture, cars, appliances, jewelry or vacations until after your loan closes. Using credit cards for these purchases can jeopardize your credit worthiness, and using cash for large purchases can also create problems if your bank is taking your cash reserve into consideration when approving your mortgage loan.
Don't get a new job.
A consistent job history is a plus when getting a loan. Changing jobs during the loan approval process can raise concerns and affect your application.
Don't switch banks or move money around.
During the loan application process, you are asked to provide bank statements on your checking and savings accounts, money market accounts and other liquid assets. To eliminate potential fraud, it is important to have a thorough paper trail to document the source of all funds. Changing banks or transferring money to another account could make it difficult to document your funds.
Don't give a good faith deposit directly to the seller in a "For Sale by Owner" purchase.
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.
Don't disregard your Mortgage Loan Officer's requests.
Your work with your Mortgage Loan Officer is not over when you have been pre-approved for a loan. During the loan process period, you need to meet certain requirements, such as supplying copies of your bank statements, W2s, etc. If you do not get the necessary documents to your Mortgage Loan Officer in a timely manner you may lose the financing you need to purchase your home.