Don't Trip Yourself up While Buying a New Home

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. It's wise to remember that until you get the keys, your lender is watching your accounts very closely. Below you'll find a list of things to avoid during this crucial time of your home purchase.

Don't overspend on big-ticket items You may be itching to buy that new couch for the soon-to-be-yours den, but it's advisable to avoid making major buys like furniture, appliances, electronic equipment, or vacations until your home loan closes. Your credit numbers could change suddenly if you make a huge purchase using plastic. It's also a bad idea to make those big-ticket purchases with cash. Lending Institutions are examining your cash reserve when considering your loan.

Don't get a new career. Your recent job history should show consistency. Getting a new career before you apply for a loan may not affect your approval at all. However, finding a new job in the middle of the loan process may influence your approval.

Don't switch your accounts to a new bank or move around your money. Bank statements from the last two or three months for accounts in your name (checking, savings, money market, and others) will probably be studied as the lending institution considers your application. In order to detect fraud, lenders need a consistent portrayal of how you earn your money and where any additional money comes from. No matter the reason, switching banks or moving funds from one account to another may raise a red flag with your lender and impede your application process.

Don't give funds directly to your seller (usually in the case of of "for sale by owner") for earnest money. Until the completion of the deal, any good faith deposit actually belongs to you. The earnest money is to be used for your expenses upon closing; some individual sellers may not understand this. An attorney or other type of neutral party can hold your earnest funds, or you may put them temporarily into a trust account until you close. Should your sale fall through, your purchase contract should specify to whom your good faith funds should go.

Not Your Average Lender can walk you through the pitfalls of getting a mortgage. Call us at 9722039033.