Don't Trip Yourself up While Buying your New Home

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

Don't overspend on big-ticket items Although you will be dreaming of ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and car purchases until your loan closes. 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. It's also a bad idea to make those huge purchases with cash. Lenders are looking at your cash on hand when considering your loan.

Don't go on a career search. Stability in your career history is a positive thing to lending institutions. Getting a new job may not compromise your ability to qualify for a loan - especially if you are getting a bigger paycheck. However, getting a new career in the middle of the application process may affect whether or not you are approved.

Don't move cash around or change banks. Bank statements from recent months for accounts in your name (checking, savings, money market, and others) will likely be reviewed as the lending institution considers your mortgage application. Your lender is looking for a consistent flow of your money over the month, in order to avoid fraud. Even for innocent reasons, moving around cash or switching banks might make it difficult for your lending institution to document your account history.

Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. As a rule, your earnest money belongs to you, not the seller up until the deal closes. Some sellers might not know that any good faith funds is to go toward your expenses upon closing. Find a lawyer or other neutral person who is able to hang on to the funds or put them in a trust account until you close. Should your sale fall through, your contract with the seller should document where this good faith deposit should go.

Pacificwide Lending can answer questions about these "Don'ts" and many others. Give us a call: 9254610500.