Don't Trip Yourself up While Buying your Home

Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves the loan. Until closing, there are still some hoops to jump through. We have listed some actions below you will want to avoid when waiting for your loan to close.

Don't overspend on big-ticket items You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but keep away from major purchases like furniture, jewelry, appliances, or vacations until closing. Using credit cards to buy new living room furniture could jeopardize your loan process by distorting your numbers. Since lending institutions are perusing your financial accounts, a large cash purchase is also a mistake.

Don't look for a new career. Lending Institutions like to see a consistent career history on your application. Changing jobs may not affect your ability to qualify for a mortgage loan - particularly if you are improving your salary. But for some, switching jobs during the mortgage approval process may bring concern and affect your application.

Don't switch banks or move money around in your accounts. Bank statements from the last two or three months for accounts in your name (checking, savings, money market, and other assets) will be reviewed as the lending institution makes decisions regarding your application. To eliminate fraud, lenders need clear documentation of how you earn your living and where additional wealth comes from. Even for practical reasons, transferring cash or changing banks might make it difficult for your lending institution to document your account history.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Until the completion of the deal, any good faith money remains yours. Although your FSBO seller might not understand this, your earnest money must be applied to the buyer's closing expenses. Find an attorney or other neutral person who is able to hold the money or place it in a trust account until you close. The final disposition of earnest funds, in the case of a failed transaction, should be indicated in the contract with the seller.

At ADVISORY MORTGAGE, we answer questions about this process every day. Give us a call: 8102292820.