Dont's When 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 says "yes" and the loan is approved. There are still a few major hurdles to jump before the house is really yours. Below you'll find a list of things to avoid during this crucial time of your home purchase.

Don't buy luxury items. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but stay away from big purchases like furniture, electronics, appliances, or vacations until your loan closes. Using credit cards to buy new living room furniture could compromise your loan process by changing your numbers dramatically. It's also a mistake to make those large purchases with cash. Lenders are looking at your cash on hand when considering your loan.

Don't go job hunting. Lending Institutions look for a consistent job history on your paperwork. Finding a new job (especially one with a bigger paycheck) may not change your ability to qualify for a loan. However, if you switch careers before approval, your mortgage process could fail or be stalled.

Don't change banks or move cash around in your accounts. Bank statements from the last two or three months for all of your accounts (checking, savings, money market, and other accounts) will probably be analyzed as the lending institution makes decisions regarding your loan application. To eliminate potential fraud, most lending institutions want thorough paperwork to determine the source of all incoming funds. Even for practical reasons, transferring finances or changing banks might make it harder for your lender to confirm your bank history.

Don't give cash directly to your seller (commonly in the case of of "for sale by owner") to be considered a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's up until closing. Your seller might not know that the earnest money is to go toward your expenses at closing. You'll need to put the money into a trust account, or get an attorney to hold it until the deal closes. The purchase agreement should dictate who gets the money if the home purchase falls through.

Don't take a vacation during your transaction to an area where you will have limited access to communications without notifying your loan officer. This real life scenario played out in 2017.  The borrowers went on a planned vacation, in the middle of processing their loan, to a remote part of Oregon where they had zero cellular service.  We needed documentation and answers only the borrowers could provide. In the end we hustled and came out on top, but not without needed to extend closing by a few days.  A good rule is to  always keep in good communication with your loan officer and loan processor.

Don't hold back information regarding current or past challenges you may have had or be experiencing.  Our team of professionals have heard it all and with before hand knowledge it is easier to address possible hurdles upfront.  When your loan officer, lender or underwriter uncover need-to-know information in the eleventh hour, it could cause delays which could cost you a loan.  In the end, your loan officer may very well know your better than your own mother/father/relative or best friend. Our bottom line is to facilitate a smooth and on-time closing, addressing potential issues upfront may avert crisis later. 

Prestige Home Mortgage can answer questions about these "Don'ts" and many others. Call us at 360-576-1920.

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