Don't Trip Yourself up While Buying a New Home

Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the loan is approved. Until your loan closes, there are still some hoops to jump through. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.

Don't overspend on big-ticket items You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but keep away from major purchases like furniture, jewelry, appliances, or vacations until closing. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Because lenders are perusing your financial accounts, a large cash purchase is also not advised.

Don't look for a new career. Stability in your career history is a positive thing to banks and other lenders. Getting a new career before you apply for a loan may not compromise your approval at all. However, switching careers in the middle of the application process may influence whether or not you are approved.

Don't switch your accounts to a new bank or move around your finances. Your lender will require you to produce recent bank statements of accounts in your name: savings, checking, money market, and other assets. In order to avoid fraud, lenders require clear documentation of how you earn your money and where additional wealth comes from. No matter the reason, switching banks or transferring money can raise a red flag with your lender and impede your application process.

Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your earnest money belongs to you, not to the seller up until closing. Although your FSBO seller may not realize this, the earnest money must go toward the buyer's closing expenses. It's wise to put the funds into a trust account, or get an attorney to hold them until the deal closes. The final disposition of earnest funds, in the case of a failed transaction, should be specified in the contract with your seller.

Greystone Loans, Inc. can answer questions about these "Don'ts" and many others. Call us: 9094671090.