Don't Trip Yourself up While Buying your Home

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. It's wise to remember that until your keys are in hand, your lender is watching you very closely. We have given you a list of things below you will want to avoid when waiting for closing.

Don't buy luxury items. You may be itching to buy that new couch for the soon-to-be-yours parlor, but it's best to stay away from making major purchases like furniture, appliances, jewelry, or vacations until your home loan closes. Your lender may send up red flags if you buy new appliances on your credit cards during your loan process. It's also a red flag to make those huge purchases with cash. Lenders are looking at your cash reserve when considering your loan.

Don't go on a job search. Lenders like to see a consistent job history on your paperwork. Finding a new career (particularly one with a bump in salary) may not affect your ability to qualify for a loan. But for some, changing careers during the mortgage loan approval process could raise concern and hinder your application.

Don't take your accounts to a new bank or move around your money. Bank statements from the last few months for all of your accounts (checking, savings, money market, and other assets) will likely be studied as the lending institution makes decisions regarding your mortgage application. To avoid potential fraud, most lenders need a detailed paper trail to document the source of all funds. No matter the reason, switching banks or transferring funds can raise a red flag with your lender and slow down your loan process.

Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, the earnest money actually belongs to you. Any good faith funds are to be applied to your expenses upon closing; some individual sellers may not realize this. You'll want to put the funds into a trust account, or get a neutral person, like an attorney to hold them until closing. If your sale falls through, the contract with the seller should indicate to whom this good faith deposit should go.

Greystone Loans, Inc. can walk you through the pitfalls of getting a mortgage. Give us a call: 9094671090.