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. Keep in mind that until your keys are in hand, your lender is watching you very closely. Here are some actions to avoid during the home buying process to be sure the transaction goes well.

Don't make expensive purchases. You may be itching to buy that new Turkish rug for the soon-to-be-yours parlor, but it's advisable to stay away from making major purchases like furniture, appliances, jewelry, or cars until your home loan closes. Financing new bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Because lenders are reviewing your bank accounts, a large cash purchase is also a bad idea.

Don't look for a new career. Stability in your career history is a good thing to lenders. Finding a new career (especially one with a better paycheck) may not jeopardize your ability to qualify for a mortgage. However, if you switch careers before you qualify, your process could fail or be stalled.

Don't switch banks or move money around in your accounts. Your lender will instruct the submission of recent bank statements on accounts in your name: checking, savings, money market, and other liquid assets. To avoid fraud, lenders want to see a consistent portrayal of how you earn your money and where additional funds come from. No matter the purpose, changing banks or transferring money may raise a red flag with your lender and slow your approval process.

Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Some FSBO sellers may not know that this good faith money is to be used for your expenses at closing. Find a lawyer or other neutral person who will hang on to the funds or place them in a trust account until closing. The final disposition of earnest money, in the case of a failed transaction, should be documented in the contract with your seller.

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