Don't Trip Yourself up While Buying your New Home

What's more fun than buying a bunch of new furniture to adorn your future home? Not much. But buying big ticket items before your loan closes could be trouble. Until your keys are in hand, there still remain some hoops to jump through. We have listed some things below we suggest you stay away from when waiting for your loan to close.

Don't overspend on big-ticket items You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but keep away from big purchases like furniture, jewelry, appliances, or vacations until closing. Using plastic to buy new living room furniture could jeopardize your loan process by changing your numbers dramatically. It's even a red flag to make those large purchases using cash. Lending Institutions are looking at your cash on hand when considering your loan.

Don't get a new career. Stability in your job history is a positive thing to lending institutions. Changing jobs may not affect your ability to qualify for a mortgage loan - particularly if you are getting a better salary. But for some, changing jobs during the loan application process could raise concern and stymie your application.

Don't move cash around or change banks. As your lending institution reviews your loan package, you will probably be required to provide bank statements for the last two or three months for your checking accounts, savings accounts, money market accounts and other liquid wealth. To eliminate potential fraud, most loans want a thorough paper trail to determine the source of all incoming funds. Even for innocent reasons, transferring money or changing banks might make it harder for your lending institution to document your account history.

Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your earnest money is yours, not the seller's up until the deal closes. Some FSBO sellers might not know that any earnest money must be applied to 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 funds, in the case of a failed transaction, should be included in the purchase agreement with the seller.

AmeriBest Mortgage can answer questions about these "Don'ts" and many others. Give us a call at 3217777277.