Don't Trip Yourself up While Buying your New Home

In the rush of excitement 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 appliance store. Keep in mind that until closing, your lender is watching you very closely. Below you'll find a list of things to avoid during this crucial time of your home purchase.

Don't throw your money around. Although you may be dreaming of ways to turn your new house into a showplace, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and car purchases until your loan closes. Financing your furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Using cash to buy expensive items can also create a bad idea: many banks consider your cash reserve when approving your loan.

Don't get a new job. Your recent career history should show stability. Getting a new career before you start the application process for a loan may not compromise your approval at all. However, if you switch careers before you qualify, your mortgage process could fail or be stalled.

Don't take your accounts to a new bank or move around your money. As your lending institution considers your mortgage package, you will likely be required to submit bank statements for the last few months on your checking and savings accounts, money market funds and other liquid wealth. In order to eliminate fraud, lenders will need a consistent portrayal of how you earn your living and where additional wealth comes from. Switching banks or moving funds elsewhere - no matter the reason - could make it harder for your lender to verify your funds.

Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. As a rule, your good faith money belongs to you, not to the seller until the sale is final. The good faith funds are to go toward your expenses upon closing; a FSBO seller might not understand this. An attorney or other type of neutral party can hold your earnest money, or you may put it temporarily into a trust account until you close. The purchase agreement should specify who gets the deposit if the transaction does not go through.

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