Don't Trip Yourself up While Buying a New 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 closing, your lender is watching your finances very closely. Below you'll find a list of actions to stay away from during this critical time of your home purchase.

Don't throw your money around. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but stay away from big purchases like furniture, jewelry, appliances, or vacations until closing. Using plastic to buy furniture could compromise your lending process by distorting your numbers. Using cash to buy expensive items can also create an issue: most banks take into consideration your available cash when approving your application.

Don't look for a new job. Consistency in your job history is a positive thing to banks and other lenders. Getting a new job may not affect your ability to qualify for a loan - especially if you are going to be making more money. However, if you switch careers before approval, your loan process could fail or be slowed down.

Don't move finances around or change banks. While the lending institution considers your mortgage loan package, you will probably be required to submit bank statements for the last few months on your saving and checking accounts, money market accounts and other liquid finances. The lending institution is looking for a consistent flow of your funds each pay period, in the interest of avoiding fraud. Even for practical purposes, transferring finances or changing banks could make it harder for your lending institution to verify your bank history.

Don't give cash directly to your seller (generally in the case of of "for sale by owner") for a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's up until the deal closes. Although some individual sellers might not realize this, your good faith funds must go toward your closing expenses. Find a lawyer or other neutral party who can hang on to the money or place it in a trust account until closing. The disposition of good faith money, if your transaction fails, should be indicated in the purchase agreement with your seller.

Pacificwide Lending can walk you through the pitfalls of getting a mortgage. Give us a call at 9254610500.