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, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. Until the keys are handed over, there are still some hurdles to jump. Below you'll find a list of things to stay away from during this crucial time of your home purchase.

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 avoid making large purchases like furniture, appliances, jewelry, or cars until your home loan closes. Your credit numbers could change suddenly if you purchase new furniture using credit cards. Because lenders are looking closely at your financial accounts, a large cash purchase is also a bad idea.

Don't go on a career search. Lending Institutions look for a consistent job history on your application. Finding a new job (particularly one with a better salary) may not hinder your ability to qualify for a mortgage. But in some cases, switching jobs during the mortgage loan application process might bring concern and stymie your application.

Don't move finances around or switch banks. Your lending institution will ask for recent bank statements for all of your accounts: checking, savings, money market, and other liquid assets. To avoid potential fraud, most loans require a thorough paper trail to verify the source of all cash. Changing banks or moving funds to another account - even if its just to pool funds - may make it difficult for your lender to verify your funds.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. As a rule, your good faith deposit is yours, not the seller's up until closing. Your good faith funds are to go toward your expenses closing; your individual seller might not realize this. An attorney or other type of neutral party can hang onto your earnest money, or you may put it temporarily into a trust account until closing. If your sale falls through, your purchase agreement should dictate to whom this earnest money should go.

Foxfield Financial can answer questions about these "Don'ts" and many others. Call us at 720-598-8300.

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