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 as soon as the seller says "yes" and the lender approves the loan. There are still a few major hurdles to jump before your loan closes. Here are some things to avoid before closing to assure your transaction goes well.

Don't empty your wallet on big-ticket items It may be tempting to order that new sofa for the soon-to-be-yours living room, but it's advisable to avoid making major purchases like furniture, appliances, electronic equipment, or cars until closing. Financing your furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. It's even a bad idea to make those large purchases using cash. Lending Institutions are looking at your cash reserve when considering your loan.

Don't go on a career search. Lending Institutions look for a consistent job history on your application. Getting a new job may not compromise your ability to qualify for a loan - especially if you are going to be making more money. But for some people, switching jobs during the mortgage application process could bring concern and stymie your application.

Don't take your accounts to a new bank or move around your finances. Bank statements from recent months for your accounts (checking, savings, money market, and others) will likely be analyzed as the lender considers your approval. Your lending institution is looking for a steady rise and fall of your money each pay period, in order to rule out fraud. No matter the purpose, moving banks or transferring funds may raise a red flag with the lender and slow down your approval process.

Don't give money directly to your seller (generally in cases of "for sale by owner") for a "good faith" deposit. Until the sale is complete, the earnest money actually belongs to you. The earnest funds are to go toward your expenses upon closing; a individual seller might not realize this. A neutral party, like an attorney can hold your earnest money, or you may put it temporarily into a trust account until you close. The final disposition of good faith funds, if your home purchase falls through, should be written in the purchase agreement with your seller.

Dayspring Bank can walk you through the pitfalls of getting a mortgage. Call us: 4025970500.