Don't Trip Yourself up While Buying a Home

With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error 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 accounts very closely. Here are some things to stay clear of during the home buying process to be sure the transaction goes smoothly.

Don't overspend on big-ticket items Although you may be planning ways to turn your new home into a castle, avoid major purchases like appliances, electronics, or furniture. We also recommend that you keep away from vacations and car purchases until the closing of your loan. Financing new stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Using cash to buy big-ticket items can even be a mistake: many lenders look at your cash on hand when approving your mortgage loan.

Don't get a new career. Lending Institutions look for a consistent work history on your paperwork. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are going to be making more money. However, getting a new career in the middle of your approval process could affect your approval.

Don't switch banks or move cash around in your bank accounts. As the lender considers your mortgage loan application, you will probably be instructed to submit bank statements for recent months for your checking and savings accounts, money market accounts and other liquid finances. In order to avoid fraud, lenders look for clear documentation of how you earn your living and where additional money comes from. No matter the purpose, changing banks or transferring funds may raise a red flag with the lender and impede your qualification process.

Don't deliver a "good faith" deposit 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 until the sale is final. Your FSBO seller may not know that this good faith money must be used for your expenses at closing. Get a lawyer or other neutral party who can hang on to the funds or put them in a trust account until closing. The disposition of good faith funds, if your sale fails, should be specified in the purchase agreement with the seller.

Dayspring Bank can answer questions about these "Don'ts" and many others. Call us: 4025970500.