Don't Trip Yourself up While Buying your New Home

What's better than getting a bunch of new furnishings to go in your future home? Nothing. But making large purchases before your loan closes could be trouble. Until your keys are in hand, there are still some hoops to jump through. We have given you a list of things below you will want to 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 stay away from major purchases like furniture, jewelry, appliances, or vacations until closing. Your credit numbers could change suddenly if you make a huge purchase using plastic. Because lenders are looking closely at your financial accounts, a large cash purchase is also a mistake.

Don't get a new career. Lending Institutions feel comfortable seeing a consistent job history on your application forms. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are going to be making more money. However, switching careers in the middle of the loan process could affect your approval.

Don't move cash around or switch banks. As your lender reviews your loan package, you will probably be required to provide bank statements for the last two or three months on your checking and savings accounts, money market funds and other liquid wealth. In order to avoid fraud, lenders look for a clear and consistent picture of how you earn your money and where additional money comes from. No matter the reason, changing banks or transferring money might raise a red flag with the lender and impede your application process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Your good faith deposit does not belong to the seller: it remains yours until closing. Although some FSBO sellers might not know this, your good faith money should be applied to your closing expenses. It's advisable to put the money into a trust account, or get an attorney to hold it until closing. The disposition of good faith funds, in the case of a failed transaction, should be written in the contract with the seller.

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