Don't Trip Yourself up While Buying a Home

Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the lender approves their loan. There are still a few major hurdles to jump before closing. Here are some actions to avoid before closing to be sure the transaction goes smoothly.

Don't empty your wallet on big-ticket items Although you may be listing ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and car purchases until your loan closes. Using credit cards to buy new living room furniture could compromise your loan process by changing your numbers dramatically. It's even a red flag to make those big purchases with cash. Lenders are examining your cash on hand when considering your loan.

Don't go on a job search. Consistency in your work history is a good thing to lending institutions. Getting a new career before you start the application process for a mortgage loan may not jeopardize your approval at all. However, finding a new job during your application process may influence your approval.

Don't move cash around or switch banks. Bank statements from the last few months for all of your accounts (checking, savings, money market, and other assets) will be analyzed as the lender makes decisions regarding your application. To avoid potential fraud, most loans require a detailed paper trail to verify the source of all incoming funds. Changing banks or transferring finances elsewhere - for whatever reason - may hinder the review of your accounts.

Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until closing, any good faith deposit remains yours. Although your FSBO seller may not realize this, your earnest money must go toward the buyer's closing expenses. A neutral party, like an attorney can hang onto your earnest money, or you may put it temporarily into a trust account until you close. If your sale falls through, your purchase contract should document to whom this good faith funds should go.

At Tenby J. Dahman The Dahman Team , we answer questions about this process every day. Call us at 3038627760.