Don't Trip Yourself up While Buying a New Home

Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the loan is approved. Until your keys are in hand, there still remain some hoops to jump through. Below you'll find a list of things to stay away from during this critical time of your home purchase.

Don't overspend on big-ticket items Although you may be dreaming of ways to turn your new home into a castle, avoid major purchases like appliances, electronics, or furniture. You will also want to keep away from vacations and car purchases until the closing of your loan. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. Because lending institutions are looking closely at your bank accounts, a large cash purchase is also not advised.

Don't get a new career. Your recent job history should show consistency. Finding a new job (especially one with a bigger salary) may not hinder your ability to qualify for a mortgage. However, finding a new job in the middle of the loan process could affect your approval.

Don't switch your accounts to a new bank or move around your finances. Your lending institution will require you to produce recent bank statements of your accounts: savings, checking, money market, and other liquid assets. To eliminate potential fraud, most loans require a thorough paper trail to verify the source of all incoming funds. Switching banks or moving finances elsewhere - for whatever purpose - could hinder the documentation of your funds.

Don't give funds directly to your seller (generally in the case of of "for sale by owner") for a "good faith" deposit. Your good faith money does not belong to the seller: it remains yours until the transaction is final. Any good faith funds are to be used for your expenses closing; some FSBO sellers might not know this. A neutral party, like an attorney can hang onto your funds, or you may put them temporarily into a trust account until you close. The disposition of earnest funds, if your transaction falls through, should be specified in the contract with the seller.

REDDISH BULL FINANCE, INC. | NMLS #1247892 can answer questions about these "Don'ts" and many others. Call us: 561-475-2281.