Don't Trip Yourself up While Buying a Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. There are still a few major hurdles to jump before your loan closes. We have given you a list of things below we suggest you avoid when waiting for closing.

Don't overspend on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but keep away from major purchases like furniture, cars, appliances, or vacations until the loan closes. Financing your stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. It's also a bad idea to make those big purchases with cash. Lenders are looking at your cash reserve when considering your loan.

Don't look for a new career. Consistency in your career history is a good thing to lenders. Finding a new career (particularly one with a better salary) may not hinder your ability to qualify for a mortgage loan. But for some people, getting a new job during the mortgage loan approval process might raise concern and hinder your approval.

Don't switch your accounts to a new bank or move around your finances. Your lending institution will ask for recent bank statements on all of your accounts: checking, savings, money market, and other assets. To detect potential fraud, most lenders require a detailed paper trail to verify the source of all funds. Changing banks or transferring money elsewhere - for whatever purpose - might make it harder for your lender to verify your funds.

Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. As a rule, your good faith deposit belongs to you, not the seller up until closing. Some FSBO sellers might not know that the earnest money should be applied to your expenses upon closing. Find a lawyer or other neutral party who is able to hang on to the deposit or put it in a trust account until you close. The contract should specify who gets the money if the transaction does not go through.

At Marshall Lending, we answer questions about this process every day. Call us at 9162758775.