Don't Trip Yourself up While Buying a Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. Keep in mind that until your keys are in hand, your lender is watching your accounts very closely. We have given you a list of actions below we suggest you avoid when waiting for closing.

Don't throw your money around. Although you will be dreaming of ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until the closing of your loan. Your lender may send up red flags if you finance your appliances on your credit cards during your loan process. Since lending institutions are looking closely at your bank accounts, a large cash purchase is also not advised.

Don't go on a job search. Consistency in your career history is a good thing to lending institutions. Getting a new job may not jeopardize your ability to qualify for a loan - especially if you are getting a better salary. However, finding a new job in the middle of the approval process could influence your approval.

Don't switch your accounts to a new bank or move around your finances. Your lending institution will instruct the submission of recent bank statements on your accounts: checking, savings, money market, and other liquid assets. Your lending institution is looking for a consistent rise and fall of your money over the pay period, in order to avoid fraud. Switching banks or moving money elsewhere - for whatever purpose - could hinder the review of your accounts.

Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Your good faith money does not belong to the seller: it remains yours until closing. Your good faith money is to go toward your expenses upon closing; a FSBO seller may not understand this. A neutral party, like an attorney can hold onto your earnest money, or you may put it temporarily into a trust account until you close. Should your home purchase fail, your contract with the seller should indicate where this earnest money should go.

Not Your Average Lender can answer questions about these "Don'ts" and many others. Give us a call: 9722039033.