Don't Trip Yourself up While Buying a New Home

Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the loan is approved. There still remain a few major hurdles to jump before the house is realy yours. We have given you a list of actions below we suggest you stay away from when waiting for your loan to close.

Don't empty your wallet on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but keep away from big purchases like furniture, cars, appliances, or vacations until your loan closes. Financing new stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. It's even a bad idea to make those big-ticket purchases using cash. Lenders are examining your cash reserve when considering your loan.

Don't go on a job search. Stability in your work history is a good thing to lenders. Getting a new career before you start the application process for a mortgage loan may not get in the way of your approval at all. However, switching careers in the middle of your loan process may influence whether or not you are approved.

Don't move cash around or change banks. Bank statements from the last few months for accounts in your name (checking, savings, money market, and other assets) will probably be studied as the lender considers your approval. The lending institution wants to see a consistent flow of your funds each month, in order to rule out fraud. Even for practical reasons, moving around cash or switching banks could make it harder for the lender to document your account history.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until closing, any earnest money remains yours. A FSBO seller may not realize that the earnest money is to go toward your expenses at closing. Find an attorney or other neutral person who can hang on to the deposit or place it in a trust account until closing. The contract should document who keeps the earnest funds if the transaction falls through.

Nationwide Home Loans can answer questions about these "Don'ts" and many others. Give us a call at 5626935048.