Don't Trip Yourself up While Buying a New Home

What's more fun than buying a bunch of new furniture to adorn your future home? Not much. But buying big ticket items before your loan closes could be trouble. It's best to remember that until closing, your lender is watching your finances very closely. Below you'll find a list of actions to avoid during this critical time of your home purchase.

Don't buy luxury items. It may be tempting to buy that new sofa for the soon-to-be-yours den, but it's best to stay away from making big ticket purchases like furniture, appliances, jewelry, or cars 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. Using cash to buy expensive items can also create a bad idea: most lending institutions take into consideration your available cash when approving your application.

Don't go on a career search. Lending Institutions look for a consistent career history on your application. Getting a new career before you apply for a loan may not compromise your approval at all. But for some, getting a new career during the mortgage loan approval process could bring concern and stymie your application.

Don't move cash around or switch banks. Bank statements from recent months for your accounts (savings, checking, money market, and others) will likely be analyzed as the lending institution makes decisions regarding your mortgage application. Your lending institution looks for a consistent flow of your money each pay period, in the interest of avoiding fraud. Changing banks or transferring funds elsewhere - for whatever purpose - may hinder the documentation of your accounts.

Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until closing, any good faith deposit actually belongs to you. Some FSBO sellers may not know that the good faith money is to go toward your expenses upon closing. Find an attorney or other neutral person who can hold the funds or put them in a trust account until closing. The final disposition of earnest funds, if your sale falls through, should be specified in the purchase agreement with the seller.

Todays Financing can answer questions about these "Don'ts" and many others. Give us a call at 2057831113.