Don't Trip Yourself up While Buying your New Home

Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the lender approves the loan. It's wise to remember that until closing, your lender is watching your finances very closely. We have given you a list of things below you will want to avoid when waiting for closing.

Don't buy luxury items. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from expensive purchases like furniture, cars, appliances, or vacations until closing. Financing your Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Using cash to buy expensive items can even create a mistake: many banks take into consideration your cash reserve when approving your mortgage loan.

Don't go on a job search. Consistency in your career history is a positive thing to banks and other lenders. Getting a new job before you start the application process for a mortgage may not get in the way of your approval at all. But for some, changing jobs during the mortgage application process might bring concern and hinder your approval.

Don't change banks or move money around in your bank accounts. Bank statements from the last few months for your accounts (savings, checking, money market, and other accounts) will likely be reviewed as the lending institution considers your approval. Your lender will need to see a consistent rise and fall of your funds each pay period, in the interest of ruling out fraud. Even for innocent reasons, transferring finances or switching banks may make it harder for the lender to document your bank history.

Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not the seller until the deal closes. Some sellers may not realize that these good faith funds should be used for your expenses at closing. Find an attorney or other neutral person who can hang on to the funds or put them in a trust account until closing. Should your sale fall through, the purchase contract should dictate to whom your earnest money should go.

New Millennium Mortgage Co. NMLS: 331173 can walk you through the pitfalls of getting a mortgage. Give us a call: (941) 366-5800.