Don't Trip Yourself up While Buying a Home

Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the lender approves their loan. Until the house is really yours, there still remain some hoops to jump through. Here are some actions to avoid before closing to be sure your transaction goes smoothly.

Don't overspend on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from big purchases like furniture, cars, appliances, or vacations until the loan closes. Financing new Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Using cash to purchase big-ticket items can even be a bad idea: most banks look at your available cash when approving your application.

Don't look for a new job. Your recent career history should show stability. Finding a new career (particularly one with a bump in salary) may not hinder your ability to qualify for a loan. However, if you switch careers before approval, your mortgage process could fail or be stalled.

Don't move cash around or change banks. Most lenders will ask for recent bank statements of all of your accounts: savings, checking, money market, and other liquid assets. In order to detect fraud, lenders want to see a consistent portrayal of how you earn your living and where additional money comes from. No matter the reason, switching banks or transferring money might raise a red flag with your lender and slow your approval process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. Any good faith money is to go toward your expenses closing; some FSBO sellers may not understand this. Find an attorney or other neutral person who will hang on to the funds or put them in a trust account until closing. Should your home purchase fail, your contract with the seller should dictate where your earnest money should go.

Omni Mortgage Corp. can answer questions about these "Don'ts" and many others. Call us: 7184417000.

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