Don't Trip Yourself up While Buying a New Home

Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the loan is approved. Until the house is really yours, there are still some hurdles to jump. We have listed some things below you will want to stay away from when waiting for your loan to close.

Don't throw your money around. Although you will be listing ways to turn your new house into a castle, avoid major purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and car purchases until the closing of your loan. Financing new Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Because lending institutions are perusing your financial accounts, a large cash purchase is also not advised.

Don't look for a new career. Lenders look for a consistent work history on your paperwork. Getting a new career before you start the application process for a loan may not get in the way of your approval at all. However, switching jobs in the middle of your application process may affect whether or not you are approved.

Don't change banks or move money around in your bank accounts. Most lenders will require you to produce recent bank statements on accounts in your name: checking, savings, money market, and other assets. In order to detect fraud, lenders require a consistent portrayal of how you earn your living and where additional wealth comes from. Even for practical reasons, transferring finances or switching banks may make it difficult for your lender to document your account history.

Don't give money directly to your seller (commonly in the case of of "for sale by owner") for earnest money. Until closing, the good faith deposit actually belongs to you. Some sellers may not realize that any good faith funds should be applied to your expenses upon closing. You'll need to put the deposit into a trust account, or get an attorney to hold it until closing. Your contract should document to whom the funds go if the home purchase falls through.

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