Don't Trip Yourself up While Buying a New Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. Keep in mind that until closing, your lender is watching your accounts very closely. We have listed some actions below we suggest you stay away from when waiting for your loan to close.

Don't buy 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 purchases like furniture, appliances, electronic equipment, or vacations until your home loan closes. Financing new bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. It's even a mistake to make those large purchases with cash. Lenders are looking at your cash on hand when considering your loan.

Don't look for a new job. Lending Institutions like to see a consistent work history on your paperwork. Finding a new job (particularly one with a bump in salary) may not jeopardize your ability to qualify for your mortgage loan. But for some people, getting a new career during the mortgage application process may bring concern and stymie your application.

Don't move finances around or change banks. Your lender will ask for recent bank statements on accounts in your name: savings, checking, money market, and other assets. To detect potential fraud, most loans require detailed paperwork to verify the source of all cash. No matter the reason, switching banks or transferring money may raise a red flag with your lender and impede your approval process.

Don't give money directly to your seller (usually in cases of "for sale by owner") to be considered a "good faith" deposit. Your good faith deposit does not belong to the seller: it remains yours until closing. Although your seller may not understand this, any good faith funds should be applied to your closing expenses. Get an attorney or other neutral party who can hold the deposit or put it in a trust account until closing. The disposition of earnest money, if your home purchase falls through, should be documented in the purchase agreement with your seller.

Tenby J. Dahman The Dahman Team can walk you through the pitfalls of getting a mortgage. Give us a call at 3038627760.