Don't Trip Yourself up While Buying your New Home

What's more fun than buying a bunch of new furniture to go in your future home? Nothing. But making big ticket purchases before your loan closes can be a mistake. It's best to remember that until closing, your lender is watching your accounts very closely. Here are some things to refrain from during the home buying process to be sure the transaction goes smoothly.

Don't make expensive purchases. Although you will be planning ways to turn your new home into a castle, avoid big ticket purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until the closing of your loan. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Using cash to purchase expensive items can even be a bad idea: most banks consider your cash on hand when approving your application.

Don't go on a job search. Lenders look for a consistent job history on your application forms. Changing jobs may not affect your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. However, switching careers in the middle of the application process could influence your approval.

Don't move money around or switch banks. While your lender considers your mortgage loan package, you will probably be required to produce bank statements for the last few months for your saving and checking accounts, money market funds and other liquid wealth. To eliminate fraud, lenders require a consistent portrayal of how you earn your money and where additional wealth comes from. Changing banks or transferring finances to another account - for whatever reason - could hinder the documentation of your accounts.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. Although your seller might not realize this, your earnest money must go toward the buyer's closing expenses. A neutral party, like an attorney can hang onto your funds, or you may place them temporarily into a trust account until closing. Your purchase contract should specify who keeps the earnest funds if the transaction does not go through.

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