Don't Trip Yourself up While Buying your Home

What's better than getting a bunch of new furnishings to adorn your future home? Not much. But buying big ticket items before closing can be a mistake. Until your loan closes, there are still some hurdles to jump. Here are some actions to avoid during the home buying process to be sure the transaction goes smoothly.

Don't throw your money around. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but stay away from expensive purchases like furniture, cars, appliances, or vacations until closing. Financing your Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Since lending institutions are perusing your bank accounts, a large cash purchase is also a bad idea.

Don't get a new job. Your recent work history should show stability. Getting a new job may not compromise your ability to qualify for a loan - especially if you are going to be making more money. However, switching jobs during the application process may affect whether or not you are approved.

Don't take your accounts to a new bank or move around your money. As your lender considers your loan package, you will likely be asked to produce bank statements for recent months for your checking and savings accounts, money market funds and other liquid wealth. In order to avoid fraud, lenders want to see clear documentation of how you earn your living and where additional funds come from. No matter the reason, moving banks or moving money from one account to another may raise a red flag with your lender and impede your loan process.

Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's up until closing. Some sellers might not know that the earnest money is to be used for your expenses upon closing. We recommend that you put the funds into a trust account, or get an attorney to hold them until the closing of the sale. The final disposition of earnest money, in the case of a failed transaction, should be documented in the contract with the seller.

MortgageZ llc NMLS 2156016 can walk you through the pitfalls of getting a mortgage. Call us at 8557558700.