Don't Trip Yourself up While Buying your Home

Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves their loan. There are still a few major hurdles to jump before closing. Here are some actions to stay clear of during the home buying process to assure the transaction goes smoothly.

Don't overspend on big-ticket items Although you will be dreaming of ways to turn your new house into a castle, try to stay away from big ticket purchases like appliances, electronics, or furniture. You will also want to avoid vacations and car purchases until the closing of your loan. Using credit cards to buy new living room furniture could compromise your lending process by distorting your numbers. It's also a bad idea to make those large purchases with cash. Lending Institutions are examining your available cash when considering your loan.

Don't look for a new career. Stability in your work history is a good thing to lenders. Getting a new job may not affect your ability to qualify for a loan - particularly if you are getting a better salary. However, if you switch careers before you qualify, your loan process could fail or be slowed down.

Don't change banks or move cash around in your accounts. Bank statements from the last few months for all of your accounts (checking, savings, money market, and other assets) will be studied as the lender considers your mortgage application. Your lending institution wants to see a steady rise and fall of your funds over the pay period, in the interest of avoiding fraud. Even for practical reasons, transferring finances or switching banks may make it harder for your lending institution to confirm your account history.

Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until closing, any good faith money remains yours. The earnest money is to be applied to your expenses closing; some FSBO sellers might not know this. An attorney or other type of neutral party can hang onto your earnest money, or you may put it temporarily into a trust account until you close. The purchase contract should specify where the funds go if the transaction does not go through.

America's Money Source can answer questions about these "Don'ts" and many others. Call us at 4078987559.