Don't Trip Yourself up While Buying your New Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. It's wise to remember that until your keys are in hand, your lender is watching you very closely. Below you'll find a list of things to stay away from during this critical time of your home purchase.

Don't buy luxury items. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but stay away from major purchases like furniture, jewelry, appliances, or vacations until your loan closes. Financing new furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. It's also a red flag to make those large purchases with cash. Lending Institutions are looking at your cash on hand when considering your loan.

Don't look for a new career. Lending Institutions feel comfortable seeing a consistent work history on your application forms. Getting a new career before you start the application process for a loan may not compromise your approval at all. But for some people, changing jobs during the mortgage loan application process could bring concern and hinder your approval.

Don't change banks or move finances around in your bank accounts. While your lender considers your loan application, you will probably be asked to submit bank statements for recent months on your checking accounts, savings accounts, money market accounts and other liquid wealth. To avoid potential fraud, most lenders require detailed paperwork to document the source of all funds. Even for innocent reasons, transferring cash or switching banks may make it difficult for the lending institution to document your account history.

Don't give cash directly to your seller (usually in cases of "for sale by owner") to be used as earnest money. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Your earnest funds are to be used for your expenses upon closing; the FSBO seller may not realize this. An attorney or other type of neutral party can hang onto your funds, or you may put them temporarily into a trust account until you close. The final disposition of good faith money, in the case of a failed transaction, should be specified in the purchase agreement with your seller.

Advantage Home Lenders can walk you through the pitfalls of getting a mortgage. Give us a call: 6317360419.