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, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. There are still a few major hurdles to jump before the house is realy yours. Here are some actions to avoid before closing to assure the transaction goes well.

Don't overspend on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new castle, but stay away from expensive purchases like furniture, jewelry, appliances, or vacations until your loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. It's even a bad idea to make those large purchases using cash. Lenders are looking at your available cash when considering your loan.

Don't get a new job. Lenders feel comfortable seeing a consistent job history on your application. Finding a new career (particularly one with a bigger paycheck) may not hinder your ability to qualify for your loan. However, finding a new job in the middle of your application process may influence whether or not you are approved.

Don't move money around or switch banks. Bank statements from the last few months for accounts in your name (checking, savings, money market, and others) will probably be reviewed as the lender considers your mortgage application. In order to eliminate fraud, lenders will need clear documentation of how you earn your living and where any additional funds come from. No matter the purpose, moving banks or transferring funds could raise a red flag with your lender and slow your application process.

Don't give funds directly to your seller (generally in cases of "for sale by owner") to be considered a "good faith" deposit. Until the sale is complete, the earnest money remains yours. The earnest funds are to go toward your expenses upon closing; some individual sellers might not understand this. Find a lawyer or other neutral person who will hold the funds or put them in a trust account until you close. If your sale falls through, the contract with the seller should indicate to whom your earnest money should go.

Tammy Belcher can walk you through the pitfalls of getting a mortgage. Call us at (804) 855-7202.