Don't Trip Yourself up While Buying your New Home

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. Keep in mind that until you get the keys, your lender is watching your finances very closely. Here are some actions to refrain from before closing to be sure your 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 keep away from big purchases like furniture, jewelry, appliances, or vacations until the loan closes. Your lender may send up red flags if you purchase your furniture on your credit cards during your loan process. It's also a bad idea to make those huge purchases with cash. Lenders are looking at your cash on hand when considering your loan.

Don't look for a new career. Your recent job history should show consistency. Changing jobs may not compromise your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. But for some people, changing jobs during the mortgage application process might raise concern and stymie your application.

Don't move finances around or change banks. Your lender will instruct the submission of recent bank statements on accounts in your name: savings, checking, money market, and other liquid assets. To detect potential fraud, most lenders want a thorough paper trail to document the source of all cash. No matter the purpose, moving banks or transferring funds could raise a red flag with the lender and slow your application process.

Don't give cash directly to your seller (generally in the case of of "for sale by owner") to be considered earnest money. As a rule, your good faith deposit belongs to you, not the seller up until closing. The good faith money is to be used for your expenses upon closing; a FSBO seller may not realize this. Get an attorney or other neutral party who is able to hang on to the funds or place them in a trust account until you close. If your sale falls through, the contract with the seller should document where the earnest money should go.

Mortgage Max Inc can answer questions about these "Don'ts" and many others. Give us a call at 760-547-2080.