Don't Trip Yourself up While Buying a 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. Until the house is really yours, there still remain some hurdles to jump. Below you'll find a list of things to avoid during this crucial time of your home purchase.

Don't empty your wallet on big-ticket items Although you will be dreaming of ways to turn your new home into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and car purchases until the closing of your loan. You may send up red flags with your lender if you purchase new electronics on your credit cards during your loan process. It's also a bad idea to make those big-ticket purchases using cash. Lenders are examining your cash on hand when considering your loan.

Don't go on a job search. Your recent career history should show consistency. Getting a new career before you start the application process for a mortgage may not jeopardize your approval at all. However, switching careers in the middle of your loan process may affect whether or not you are approved.

Don't move finances around or switch banks. Bank statements from the last few months for all of your accounts (savings, checking, money market, and others) will likely be analyzed as the lender makes decisions regarding your application. To detect fraud, lenders need a clear and consistent picture of how you earn your money and where additional money comes from. No matter the purpose, changing banks or moving money from one account to another can raise a red flag with the lender and impede your loan process.

Don't give funds directly to your seller (generally in cases of "for sale by owner") to be used as a "good faith" deposit. Until closing, any good faith money remains yours. Any good faith money is to go toward your expenses upon closing; a individual seller may not know this. A neutral party, like an attorney can hold onto your earnest money, or you may put it temporarily into a trust account until closing. Should your home purchase fail, your purchase contract should specify where the earnest money should go.

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