Don't Trip Yourself up While Buying a Home

Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves the loan. Keep in mind that until your keys are in hand, your lender is watching your accounts very closely. Below you'll find a list of things to stay away from during this crucial time of your home purchase.

Don't empty your wallet 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. We also recommend that you avoid vacations and car purchases until the closing of your loan. Your credit numbers could change suddenly if you purchase new furniture using plastic. Using cash to buy expensive items can even be an issue: many lenders consider your cash reserve when approving your mortgage.

Don't look for a new job. Your recent career history should show stability. Finding a new job (particularly one with a better salary) may not jeopardize your ability to qualify for a mortgage loan. But for some people, getting a new career during the mortgage approval process may bring concern and hinder your application.

Don't take your accounts to a new bank or move around your cash. Bank statements from the last few months for accounts in your name (savings, checking, money market, and others) will likely be reviewed as the lending institution considers your mortgage application. To avoid fraud, lenders look for a consistent portrayal of how you earn your living and where any additional funds come from. Switching banks or transferring money elsewhere - even if its just to pool funds - may hinder the review of your funds.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your good faith deposit belongs to you, not the seller until the deal closes. The good faith funds are to go toward your expenses upon closing; some sellers may not know this. Find an attorney or other neutral party who is able to hold the funds or place them in a trust account until closing. The disposition of good faith money, in the case of a failed transaction, should be documented in the contract with the seller.

1st Credential Mortgage Inc can answer questions about these "Don'ts" and many others. Give us a call: (281) 778-0805.