Don't Trip Yourself up While Buying a Home

Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the loan is approved. Until your keys are in hand, there are still some hurdles to jump. We have given you a list of things below we suggest you avoid when waiting for closing.

Don't throw your money around. Although you will be listing ways to turn your new house into a showplace, try to stay away from big ticket purchases like appliances, electronics, or furniture. We also recommend that you stay away from vacations and car purchases until your loan closes. Your lender may send up red flags if you purchase your electronics on your credit cards in the middle of your loan process. Using cash to purchase big-ticket items can even be a problem: many lending institutions consider your cash on hand when approving your mortgage loan.

Don't get a new career. Your recent job history should show consistency. Getting a new job before you apply for a mortgage may not affect your approval at all. However, finding a new career during the application process may influence your approval.

Don't take your accounts to a new bank or move around your finances. Bank statements from recent months for accounts in your name (checking, savings, money market, and other accounts) will likely be reviewed as the lender makes decisions regarding your mortgage application. Your lending institution looks for a steady flow of your funds each month, in order to avoid fraud. Even for innocent reasons, moving around funds or changing banks may make it more difficult for your lending institution to verify your account history.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. As a rule, your good faith money is yours, not the seller's until the sale is final. Although some FSBO sellers may not understand this, the good faith money must be applied to your closing expenses. An attorney or other type of neutral party can hang onto your earnest funds, or you may put them temporarily into a trust account until you close. The purchase contract should document who keeps the money if the transaction does not go through.

Foxfield Financial can answer questions about these "Don'ts" and many others. Give us a call: 720-598-8300.