Don't Trip Yourself up While Buying your New Home

Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the loan is approved. There still remain a few major hurdles to jump before the keys are handed over. Here are some things to avoid during the home buying process to be sure your transaction goes well.

Don't buy big-ticket items. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but keep away from big purchases like furniture, jewelry, appliances, or vacations until the loan closes. You may send up red flags with your lender if you finance your electronics on your credit cards in the middle of your loan process. It's also a bad idea to make those large purchases with cash. Lenders are looking at your available cash when considering your loan.

Don't get a new job. Stability in your career history is a positive thing to lenders. Finding a new career (particularly one with a better salary) may not change your ability to qualify for your mortgage. However, switching careers during your loan process could affect whether or not you are approved.

Don't switch banks or move finances around in your bank accounts. Bank statements from the last two or three months for accounts in your name (savings, checking, money market, and other accounts) will be analyzed as the lending institution makes decisions regarding your approval. To eliminate fraud, lenders want to see clear documentation of how you earn your living and where additional wealth comes from. Changing banks or moving funds to another account - no matter the reason - may make it harder for the lender to review your funds.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Your earnest money does not belong to the seller: it is actually yours until the transaction is final. Some sellers may not know that the good faith money is to go toward your expenses at closing. It's best to put the funds into a trust account, or get a neutral party, like an attorney to hold them until the deal closes. The disposition of earnest money, if your home purchase fails, should be documented in the purchase agreement with your seller.

Firelight Mortgage Consultants can answer questions about these "Don'ts" and many others. Call us at 3032282254.