Don't Trip Yourself up While Buying your New Home

Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the loan is approved. There are still a few major hurdles to jump before closing. We have listed some actions below we suggest you stay away from when waiting for closing.

Don't empty your wallet on big-ticket items You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but keep away from big purchases like furniture, cars, appliances, or vacations until the loan closes. Your lender may send up red flags if you finance new electronics on your credit cards during your loan process. Since lending institutions are reviewing your bank accounts, a large cash purchase is also a mistake.

Don't go on a job search. Your recent work history should show stability. Finding a new career (especially one with a bigger paycheck) may not affect your ability to qualify for your mortgage loan. However, switching jobs in the middle of your approval process might affect your approval.

Don't switch your accounts to a new bank or move around your cash. As your lending institution considers your mortgage loan package, you will likely be asked to provide bank statements for the last two or three months on your saving and checking accounts, money market accounts and other liquid assets. To avoid potential fraud, most loans require a thorough paper trail to determine the source of all incoming funds. Even for practical purposes, transferring cash or changing banks may make it difficult for the lender to verify your bank history.

Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it is actually yours until closing. Any good faith funds are to go toward your expenses closing; some sellers might not know this. An attorney or other type of neutral party can hold your funds, or you may place them temporarily into a trust account until you close. The disposition of good faith funds, in the case of a failed transaction, should be documented in the purchase agreement with your seller.

Financial Edge Mortgage Corp. can answer questions about these "Don'ts" and many others. Call us at 425-508-9988.

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