Don't Trip Yourself up While Buying your New Home

Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the loan is approved. It's wise to remember that until you get the keys, your lender is watching your finances very closely. We have given you a list of actions below we suggest you stay away from when waiting for your loan to close.

Don't buy luxury items. Although you will be dreaming of ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and vehicle purchases until your loan closes. Financing new furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. It's even a mistake to make those large purchases using cash. Lending Institutions are examining your available cash when considering your loan.

Don't go on a job search. Lending Institutions like to see a consistent career history on your application. Changing jobs may not jeopardize your ability to qualify for a loan - especially if you are getting a better salary. However, finding a new career during your approval process could affect whether or not you are approved.

Don't switch your accounts to a new bank or move around your cash. While the lender considers your mortgage loan package, you will likely be asked to provide bank statements for recent months on your checking accounts, savings accounts, money market funds and other liquid wealth. The lender looks for a steady flow of your money over the month, in the interest of avoiding fraud. Even for practical purposes, moving around finances or switching banks may make it more difficult for the lender to document your account history.

Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it is actually yours until closing. Your seller might not realize that your good faith money must go toward your expenses at closing. Find a lawyer or other neutral party who can hold the money or put it in a trust account until closing. Your purchase contract should indicate to whom the funds go if the transaction falls through.

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