Don't Trip Yourself up While Buying your Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. Keep in mind that until your keys are in hand, your lender is watching you very closely. Here are some actions to avoid during the home buying process to be sure your transaction goes well.

Don't make expensive purchases. You may be itching to order that new sofa for the soon-to-be-yours den, but it's best to stay away from making major buys like furniture, appliances, jewelry, or vacations until closing. Using plastic to buy new living room furniture could jeopardize your lending process by distorting your numbers. Using cash to purchase expensive items can even be a problem: many lenders look at your cash reserve when approving your application.

Don't get a new career. Lending Institutions look for a consistent career history on your application. Getting a new job may not affect your ability to qualify for a loan - especially if you are improving your salary. But for some, switching jobs during the loan approval process might bring concern and affect your approval.

Don't switch your accounts to a new bank or move around your cash. As your lender reviews your mortgage loan package, you will probably be instructed to provide bank statements for recent months on your saving and checking accounts, money market funds and other liquid assets. To avoid potential fraud, most loans want thorough paperwork to verify the source of all incoming funds. Even for innocent purposes, moving around money or changing banks could make it harder for your lender to document your account history.

Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith money does not belong to the seller: it is actually yours until the transaction is final. Your FSBO seller may not know that any good faith funds must be used for your expenses at closing. We recommend that you put the funds into a trust account, or get a neutral person, like an attorney to hold them until the deal closes. The purchase contract should document to whom the deposit goes if the transaction fails.

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