Don't Trip Yourself up While Buying your Home

Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the loan is approved. Until your loan closes, there are still some hoops to jump through. Below you'll find a list of things to avoid during this crucial time of your home purchase.

Don't throw your money around. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from big purchases like furniture, jewelry, appliances, or vacations until the loan closes. Using credit cards to buy furniture could jeopardize your loan process by distorting your numbers. Because lending institutions are looking closely at your financial accounts, a large cash purchase is also not advised.

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

Don't move cash around or change banks. Bank statements from the last two or three months for accounts in your name (savings, checking, money market, and other accounts) will likely be analyzed as the lender makes decisions regarding your mortgage application. The lender wants to see a consistent flow of your money over the pay period, in the interest of ruling out fraud. Even for practical purposes, moving around funds or switching banks may make it harder for your lender to confirm your bank history.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until closing, any good faith deposit actually belongs to you. Your good faith money is to be applied to your expenses closing; your individual seller might not understand this. It's advisable to put the funds into a trust account, or get an attorney to hold them until closing. Should your home purchase fail, your purchase contract should indicate where your earnest money should go.

At AmeriBest Mortgage, we answer questions about this process every day. Call us: 3217777277.