Don't Trip Yourself up While Buying a New Home

With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. Keep in mind that until your keys are in hand, your lender is watching you 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. Although you may be planning ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or furniture. You will also want to avoid vacations and car purchases until the closing of your loan. Using plastic to buy furniture could jeopardize your lending process by altering your numbers dramatically. Using cash to purchase expensive items can also create a mistake: many banks take into consideration your cash reserve when approving your mortgage loan.

Don't look for a new job. Your recent work history should show consistency. Getting a new job may not compromise your ability to qualify for a mortgage loan - especially if you are improving your salary. However, switching jobs during your application process may influence your approval.

Don't change banks or move money around in your bank accounts. As your lending institution considers your mortgage package, you will probably be required to produce bank statements for recent months for your saving and checking accounts, money market funds and other liquid assets. Your lender wants to see a steady flow of your funds over the month, in the interest of avoiding fraud. Even for practical purposes, transferring finances or switching banks could make it difficult for the lending institution to confirm your bank history.

Don't give money directly to your seller (generally in cases of "for sale by owner") for a "good faith" deposit. Until closing, any good faith deposit remains yours. Your seller may not know that any good faith money must go toward your expenses at closing. We recommend that you put the deposit into a trust account, or get a neutral party, like a lawyer, to hold it until the deal closes. The final disposition of earnest money, if your home purchase fails, should be specified in the purchase agreement with the seller.

U.S.A. Lending, Inc. can answer questions about these "Don'ts" and many others. Call us: 305-967-7200.