Don't Trip Yourself up While Buying your Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. Keep in mind that until closing, your lender is watching you very closely. Here are some actions to refrain from during the home buying process to be sure the transaction goes smoothly.

Don't buy big-ticket items. You may be itching to buy that new Turkish rug for the soon-to-be-yours living room, but it's advisable to stay away from making major purchases like furniture, appliances, jewelry, or cars until closing. Using plastic to buy new living room furniture could compromise your loan process by changing your numbers dramatically. It's even a red flag to make those big-ticket purchases using cash. Lending Institutions are looking at your available cash when considering your loan.

Don't look for a new job. Consistency in your work history is a positive thing to banks and other lenders. Changing jobs may not affect your ability to qualify for a mortgage loan - particularly if you are getting a better salary. But for some people, changing jobs during the mortgage loan application process might bring concern and stymie your approval.

Don't switch banks or move finances around in your accounts. Most lenders will require you to submit recent bank statements for accounts in your name: savings, checking, money market, and other liquid assets. Your lending institution looks for a steady flow of your funds each pay period, in the interest of avoiding fraud. Switching banks or moving funds elsewhere - for whatever reason - may make it difficult for the lender to review your funds.

Don't give cash directly to your seller (generally in the case of of "for sale by owner") to be considered earnest money. Your earnest money does not belong to the seller: it remains yours until closing. Although your FSBO seller might not understand this, your earnest money must be applied to the buyer's closing expenses. Find an attorney or other neutral person who will hang on to the funds or put them in a trust account until closing. If your sale falls through, your purchase contract should document to whom the earnest money should go.

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

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