Don't Trip Yourself up While Buying your New Home

With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. It's wise to remember that until your keys are in hand, your lender is watching you very closely. Here are some actions to refrain from before closing to be sure your transaction goes well.

Don't make expensive purchases. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but stay away from expensive purchases like furniture, cars, appliances, or vacations until closing. Using plastic to buy new living room furniture could compromise your loan process by distorting your numbers. It's even a red flag to make those big-ticket purchases using cash. Lenders are examining your cash on hand when considering your loan.

Don't go on a job search. Lenders look for a consistent job history on your paperwork. Finding a new job (particularly one with a bump in salary) may not affect your ability to qualify for your loan. However, getting a new job in the middle of the application process may affect whether or not you are approved.

Don't switch your accounts to a new bank or move around your finances. Bank statements from recent months for accounts in your name (checking, savings, money market, and other assets) will be analyzed as the lender makes decisions regarding your mortgage application. To eliminate fraud, lenders want to see clear documentation of how you earn your money and where any additional money comes from. Even for innocent purposes, moving around money or changing banks may make it harder for the lender to confirm your account history.

Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Your good faith deposit does not belong to the seller: it is actually yours until closing. The earnest money is to go toward your expenses closing; some sellers might not understand this. It's wise to put the funds into a trust account, or get an attorney to hold them until closing. The purchase contract should specify to whom the deposit goes if the transaction does not go through.

Marshall Lending can walk you through the pitfalls of getting a mortgage. Call us at 9162758775.