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 carrying their enthusiasm straight to the mall or appliance store. Until your keys are in hand, there are still some hurdles to jump. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.

Don't empty your wallet on big-ticket items You may be tempted to order that new sofa for the soon-to-be-yours parlor, but it's best to stay away from making large buys like furniture, appliances, electronic equipment, or vacations until your home loan closes. You may send up red flags with your lender if you buy your appliances on your credit cards in the middle of your loan process. Using cash to buy big-ticket items can also create a bad idea: many lending institutions take into consideration your cash on hand when approving your mortgage.

Don't go on a career search. Your recent work history should show consistency. Getting a new career before you apply for a mortgage may not jeopardize your approval at all. However, switching careers during the approval process might affect whether or not you are approved.

Don't change banks or move cash around in your accounts. Bank statements from recent months for your accounts (savings, checking, money market, and other accounts) will be studied as the lender makes decisions regarding your approval. The lender is looking for a consistent rise and fall of your money each pay period, in order to avoid fraud. Even for practical reasons, moving around funds or switching banks might make it harder for the lending institution to verify your bank history.

Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until closing, the good faith deposit remains yours. Your seller may not know that the good faith money must be applied to your expenses upon closing. We recommend that you put the funds into a trust account, or get a neutral party, like a lawyer to hold them until closing. The contract should document where the money goes if the transaction does not go through.

T.J. Cullen LO NMLS#: 145102 can walk you through the pitfalls of getting a mortgage. Call us at 8433007558.

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