Don't Trip Yourself up While Buying a Home

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before closing. Below you'll find a list of actions to avoid during this crucial time of your home purchase.

Don't overspend on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but stay away from major purchases like furniture, cars, appliances, or vacations until your loan closes. Your lender may send up red flags if you purchase your appliances on your credit cards in the middle of your loan process. Since lenders are examining your financial accounts, a large cash purchase is also a mistake.

Don't look for a new career. Lending Institutions like to see a consistent job history on your application forms. Finding a new career (particularly one with a bigger paycheck) may not jeopardize your ability to qualify for your mortgage loan. But for some people, changing jobs during the mortgage application process may bring concern and stymie your application.

Don't switch banks or move finances around in your accounts. Bank statements from the last few months for accounts in your name (savings, checking, money market, and other assets) will be analyzed as the lender makes decisions regarding your approval. In order to avoid fraud, lenders will need a clear and consistent picture of how you earn your money and where additional funds come from. No matter the reason, switching banks or transferring money could raise a red flag with the lender and slow down your qualification process.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until the completion of the deal, any good faith money remains yours. A FSBO seller may not realize that your good faith money must go toward your expenses upon closing. Get a lawyer or other neutral person who can hold the funds or put them in a trust account until closing. The disposition of earnest funds, in the case of a failed transaction, should be documented in the contract with your seller.

At Foxfield Financial, we answer questions about this process every day. Call us at 720-598-8300.