Things to Avoid While Buying a New Home

Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the lender approves the loan. There are still a few major hurdles to jump before the house is realy yours. Below you'll find a list of things to avoid during this critical time of your home purchase.

Don't empty your wallet on big-ticket items Although you will be planning ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until the closing of your loan. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Because lending institutions are looking closely at your financial accounts, a large cash purchase is also not advised.

Don't go on a career search. Your recent work history should show consistency. Changing jobs may not affect your ability to qualify for a mortgage loan - especially if you are getting a better salary. However, getting a new job in the middle of the approval process could influence your approval.

Don't switch banks or move money around in your accounts. Bank statements from the last two or three months for accounts in your name (savings, checking, money market, and others) will probably be analyzed as the lender considers your approval. To avoid fraud, lenders need a clear and consistent picture of how you earn your living and where additional funds come from. No matter the reason, changing banks or transferring money can raise a red flag with your lender and slow down your approval process.

Don't give funds directly to your seller (commonly in the case of of "for sale by owner") for a "good faith" deposit. As a rule, your good faith money belongs to you, not to the seller up until closing. Although your seller might not realize this, your earnest money must be used for your closing expenses. An attorney or other type of neutral party can hang onto your deposit, or you may put it temporarily into a trust account until you close. The disposition of earnest funds, if your transaction falls through, should be written in the contract with the seller.

Foxfield Financial can answer questions about these "Don'ts" and many others. Call us at 7205988300.