Don't Trip Yourself up While Buying a Home

Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the lender approves the loan. Until the house is really yours, there still remain some hoops to jump through. Below you'll find a list of things to stay away from during this critical time of your home purchase.

Don't overspend on big-ticket items Although you may be listing ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. You will also want to stay away from vacations and car purchases until your loan closes. Your credit numbers could change suddenly if you purchase new furniture using plastic. Because lending institutions are perusing your financial accounts, a large cash purchase is also a mistake.

Don't get a new job. Lenders feel comfortable seeing a consistent work history on your application. Finding a new career (particularly one with a bigger paycheck) may not affect your ability to qualify for a mortgage loan. However, if you switch careers before your loan is approved, your loan process could fail or be bogged down.

Don't change banks or move finances around in your accounts. Bank statements from the last few months for accounts in your name (savings, checking, money market, and other assets) will likely be studied as the lending institution makes decisions regarding your mortgage application. To eliminate potential fraud, most loans require thorough paperwork to determine the source of all incoming funds. Switching banks or transferring money elsewhere - for whatever purpose - could hinder the documentation of your funds.

Don't give money directly to your seller (usually in the case of of "for sale by owner") for a "good faith" deposit. As a rule, your earnest money belongs to you, not to the seller up until closing. Some FSBO sellers may not realize that this earnest money must be used for your expenses upon closing. An attorney or other type of neutral party can hold your earnest funds, or you may put them temporarily into a trust account until closing. If your home purchase fails, the contract with the seller should dictate to whom your earnest money should go.

At New Millennium Mortgage Co. NMLS: 331173, we answer questions about this process every day. Call us at (941) 366-5800.