Don't Trip Yourself up While Buying your Home

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. It's wise to remember that until your keys are in hand, your lender is watching your accounts very closely. Below you'll find a list of actions to avoid during this crucial time of your home purchase.

Don't make expensive purchases. Although you may be dreaming of ways to turn your new home into a castle, avoid major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until the closing of your loan. Using plastic to buy new living room furniture could compromise your lending process by distorting your numbers. It's also a red flag to make those huge purchases using cash. Lenders are examining your cash reserve when considering your loan.

Don't look for a new career. Stability in your career history is a positive thing to lenders. Changing jobs may not compromise your ability to qualify for a loan - especially if you are getting a better salary. However, switching jobs in the middle of the loan process might influence your approval.

Don't change banks or move cash around in your bank accounts. Bank statements from the last few months for accounts in your name (checking, savings, money market, and other assets) will be reviewed as the lender considers your mortgage application. The lender hopes to see a consistent rise and fall of your funds each month, in order to rule out fraud. Switching banks or moving finances elsewhere - even if its just to pool funds - may hinder the review of your funds.

Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. As a rule, your earnest money belongs to you, not the seller up until the deal closes. Some FSBO sellers may not realize that your good faith funds must be applied to your expenses upon closing. Find an attorney or other neutral party who is able to hold the funds or put them in a trust account until closing. If your transaction fails, the contract with the seller should document where this good faith deposit should go.

La Paz Mortgage can walk you through the pitfalls of getting a mortgage. Call us: 9497706067.