Don't Trip Yourself up While Buying your Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. Keep in mind that until you get the keys, your lender is watching you very closely. Here are some actions to stay clear of during the home buying process to be sure the transaction goes smoothly.

Don't overspend on big-ticket items Although you may be planning ways to turn your new home into a showplace, avoid major purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until your loan closes. You may send up red flags with your lender if you purchase new appliances on your credit cards in the middle of your loan process. Using cash to purchase big items can also create an issue: many banks consider your available cash when approving your loan.

Don't go on a career search. Your recent career history should show consistency. Finding a new career (especially one with a bump in salary) may not affect your ability to qualify for a mortgage. However, if you switch careers before your loan is approved, your mortgage process could fail or be bogged down.

Don't switch your accounts to a new bank or move around your money. Bank statements from the last two or three months for your accounts (checking, savings, money market, and other accounts) will probably be studied as the lending institution considers your loan application. In order to detect fraud, lenders require a consistent portrayal of how you earn your money and where any additional wealth comes from. Changing banks or transferring funds elsewhere - no matter the purpose - could make it harder for the lender to document your funds.

Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's until the deal closes. Your seller may not realize that your good faith funds must go toward your expenses upon closing. Find a lawyer or other neutral party who will hold the money or put it in a trust account until closing. Your contract should document where the funds go if the home purchase falls through.

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