Don't Trip Yourself up While Buying your New Home

What's more fun than buying a bunch of new stuff to go in your future home? Not much. But buying big ticket items before closing can be harmful. There are still a few major hurdles to jump before your loan closes. We have listed some things below you will want to stay away from when waiting for closing.

Don't overspend on big-ticket items You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but stay away from major purchases like furniture, jewelry, appliances, or vacations until closing. You may send up red flags with your lender if you buy new electronics on your credit cards during your loan process. Using cash to buy big-ticket items can also create a mistake: most lenders consider your available cash when approving your loan.

Don't get a new career. Consistency in your job history is a positive thing to lending institutions. Getting a new job before you apply for a mortgage may not get in the way of your approval at all. However, if you switch careers before you qualify, your mortgage process could fail or be slowed down.

Don't move cash around or switch banks. While the lending institution reviews your mortgage application, you will likely be instructed to produce bank statements for recent months on your checking accounts, savings accounts, money market funds and other liquid wealth. To detect fraud, lenders need clear documentation of how you earn your money and where any additional wealth comes from. Switching banks or moving funds elsewhere - even if its just to pool funds - could hinder the documentation of your funds.

Don't give money directly to your seller (usually in cases of "for sale by owner") for earnest money. Until the sale is complete, the earnest money actually belongs to you. Any earnest funds are to be applied to your expenses upon closing; some sellers may not know this. Get an attorney or other neutral party who can hold the funds or place them in a trust account until closing. Should your home purchase fail, your contract with the seller should indicate where your good faith funds should go.

BeneGroup, Inc. can walk you through the pitfalls of getting a mortgage. Call us: 4083956018.