Don't Trip Yourself up While Buying your Home

What's better than buying a bunch of new furniture to go in your future home? Nothing. But buying big ticket items before your loan closes can be harmful. Keep in mind that until your keys are in hand, your lender is watching your finances very closely. We have given you a list of actions below we suggest you stay away from when waiting for closing.

Don't make expensive purchases. You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but keep away from big purchases like furniture, jewelry, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Using cash to buy big items can also create a mistake: most banks look at your cash on hand when approving your mortgage loan.

Don't go on a career search. Your recent work history should show stability. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are improving your salary. But in some cases, changing careers during the loan approval process could bring concern and stymie your application.

Don't move cash around or switch banks. Your lending institution will ask for recent bank statements for your accounts: savings, checking, money market, and other liquid assets. To eliminate potential fraud, most lenders need a thorough paper trail to document the source of all funds. Even for practical reasons, moving around funds or switching banks could make it harder for your lender to document your account history.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your good faith money belongs to you, not the seller up until the sale is final. Some sellers may not realize that the good faith money is to go toward your expenses at closing. A neutral party, like an attorney can hang onto your earnest money, or you may put it temporarily into a trust account until you close. The purchase agreement should document to whom the funds go if the home purchase fails.

At Firelight Mortgage Consultants, we answer questions about this process every day. Give us a call at 3032282254.