Don't Trip Yourself up While Buying your Home

Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the lender approves their loan. Until closing, there still remain some hurdles to jump. Here are some things to avoid during the home buying process to be sure the transaction goes well.

Don't empty your wallet on big-ticket items You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but keep away from big purchases like furniture, jewelry, appliances, or vacations until closing. Your lender may send up red flags if you purchase new electronics on your credit cards during your loan process. Using cash to purchase big-ticket items can also be an issue: many banks take into consideration your available cash when approving your mortgage.

Don't go on a career search. Lenders feel comfortable seeing a consistent work history on your application. Changing jobs may not affect your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. However, if you switch careers before approval, your mortgage process could fail or be bogged down.

Don't take your accounts to a new bank or move around your finances. As the lender reviews your mortgage application, you will likely be required to produce bank statements for recent months on your checking accounts, savings accounts, money market funds and other liquid assets. To avoid potential fraud, most lending institutions need thorough paperwork to determine the source of all incoming funds. No matter the reason, changing banks or transferring money may raise a red flag with your lender and slow your loan process.

Don't give money directly to your seller (usually in cases of "for sale by owner") to be considered a "good faith" deposit. Until the sale is complete, the good faith money actually belongs to you. The earnest money is to be used for your expenses closing; your individual seller may not understand this. Find an attorney or other neutral party who is able to hold the money or place it in a trust account until closing. The final disposition of earnest money, if your sale falls through, should be specified in the purchase agreement with the seller.

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Company NMLS # 303440 can walk you through the pitfalls of getting a mortgage. Give us a call at 5122916100.