Don't Trip Yourself up While Buying your Home

Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the lender approves their loan. Until the keys are handed over, there are still some hurdles to jump. Below you'll find a list of things to avoid during this critical time of your home purchase.

Don't buy luxury items. You may be tempted to buy that new easy-chair for the soon-to-be-yours living room, but it's advisable to stay away from making major purchases like furniture, appliances, electronic equipment, or cars until your home loan closes. Using credit cards to buy furniture could compromise your loan process by altering your numbers dramatically. Since lending institutions are examining your financial accounts, a large cash purchase is also a mistake.

Don't get a new career. Your recent career history should show stability. Getting a new career before you start the application process for a loan may not get in the way of your approval at all. However, if you switch careers before approval, your process could fail or be stalled.

Don't move finances around or switch banks. Most lenders will instruct the submission of recent bank statements on your accounts: savings, checking, money market, and other liquid assets. The lender looks for a steady flow of your funds each month, in order to rule out fraud. Even for practical reasons, transferring finances or changing banks could make it harder for your lender to document your bank history.

Don't give earnest money 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 the sale closes. Although your seller might not realize this, the good faith money should go toward your closing expenses. A neutral party, like an attorney can hold your deposit, or you may put it temporarily into a trust account until closing. Should your sale fall through, the contract with the seller should indicate to whom your good faith funds should go.

At Foxfield Financial, we answer questions about this process every day. Give us a call: 720-598-8300.

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