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 error of carrying their enthusiasm straight to the mall or furniture store. There still remain a few major hurdles to jump before the keys are handed over. Below you'll find a list of things to avoid during this critical time of your home purchase.

Don't make expensive purchases. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but stay away from expensive purchases like furniture, cars, appliances, or vacations until the loan closes. Your lender may send up red flags if you buy your electronics on your credit cards in the middle of your loan process. Because lending institutions are looking closely at your financial accounts, a large cash purchase is also not advised.

Don't go on a career search. Your recent job history should show consistency. Getting a new job before you start the application process for a mortgage loan may not get in the way of your approval at all. But in some cases, changing jobs during the loan application process may raise concern and affect your application.

Don't move finances around or switch banks. Most lenders will require you to produce recent bank statements on accounts in your name: savings, checking, money market, and other assets. To eliminate potential fraud, most loans need detailed paperwork to document the source of all incoming funds. No matter the reason, moving banks or transferring funds might raise a red flag with your lender and slow your approval process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Your earnest money does not belong to the seller: it is actually yours until closing. Although your FSBO seller may not realize this, any earnest money should go toward the buyer's closing expenses. Find an attorney or other neutral party who can hang on to the funds or place them in a trust account until you close. If your transaction fails, your contract with the seller should dictate where the good faith deposit should go.

Nationwide Home Loans can answer questions about these "Don'ts" and many others. Call us at 5626935048.