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, many homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. Until your loan closes, there are still some hurdles to jump. Here are some actions to avoid before closing to assure your transaction goes smoothly.

Don't make expensive purchases. It may be tempting to order that new Turkish rug for the soon-to-be-yours parlor, but it's advisable to avoid making large buys like furniture, appliances, electronic equipment, or cars until closing. Using plastic to buy new living room furniture could jeopardize your loan process by altering your numbers dramatically. Using cash to buy big-ticket items can also be a mistake: many lending institutions look at your available cash when approving your mortgage loan.

Don't look for a new career. Lending Institutions look for a consistent job history on your application forms. Getting a new job before you apply for a loan may not affect your approval at all. But in some cases, switching jobs during the loan approval process could raise concern and affect your application.

Don't switch your accounts to a new bank or move around your cash. While the lender reviews your mortgage loan application, you will likely be instructed to submit bank statements for the last two or three months on your saving and checking accounts, money market accounts and other liquid assets. In order to detect fraud, lenders will need a consistent portrayal of how you earn your living and where any additional wealth comes from. No matter the purpose, moving banks or transferring funds might raise a red flag with the lender and slow down your application process.

Don't give funds directly to your seller (generally in cases of "for sale by owner") for a "good faith" deposit. Your good faith money does not belong to the seller: it is actually yours until closing. Your good faith money is to be used for your expenses closing; some sellers might not understand this. Find a lawyer or other neutral party who will hold the funds or place them in a trust account until you close. If your sale falls through, the purchase agreement should document to whom your good faith funds should go.

At BeneGroup, Inc., we answer questions about this process every day. Give us a call: 4083956018.