Don't Trip Yourself up While Buying a New Home

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With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their excitement straight to the mall or furniture store. There are still a few major hurdles to jump before the keys are handed over. We have given you a list of actions below we suggest you avoid when waiting for your loan to close.

Don't buy luxury items. Although you may be planning ways to turn your new house into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to stay away from vacations and vehicle purchases until the closing of your loan. Financing new bedroom furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Because lending institutions are looking closely at your financial accounts, a large cash purchase is also not advised.

Don't get a new career. Your recent work history should show consistency. Getting a new job may not affect your ability to qualify for a loan - especially if you are improving your salary. However, getting a new career in the middle of your application process may affect your approval.

Don't move cash around or switch banks. Bank statements from the last two or three months for accounts in your name (savings, checking, money market, and other assets) will probably be analyzed as the lender considers your mortgage application. To avoid fraud, lenders need a consistent portrayal of how you earn your living and where additional money comes from. Even for practical purposes, transferring money or changing banks could make it more difficult for the lender to verify your bank history.

Don't give cash directly to your seller (generally in cases of "for sale by owner") for a "good faith" deposit. Your good faith deposit does not belong to the seller: it remains yours until closing. Any good faith money is to go toward your expenses upon closing; the FSBO seller might not know this. We recommend that you put the funds into a trust account, or get a neutral party, like a lawyer to hold them until the closing of the sale. The final disposition of good faith money, if your sale fails, should be indicated in the contract with your seller.

Liberty Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call at 281-542-7392.

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