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 mistake of taking their enthusiasm straight to the mall or appliance store. Until the keys are handed over, there are still some hoops to jump through. We have listed some things below you will want to stay away from when waiting for your loan to close.

Don't buy big-ticket items. Although you may be dreaming of ways to turn your new home into a castle, avoid major purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until your loan closes. Financing new stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Since lenders are examining your bank accounts, a large cash purchase is also a bad idea.

Don't get a new job. Your recent work history should show stability. Changing jobs may not compromise your ability to qualify for a loan - particularly if you are improving your salary. However, getting a new career during the approval process might influence whether or not you are approved.

Don't switch your accounts to a new bank or move around your cash. As the lender considers your mortgage application, you will probably be required to produce bank statements for the last two or three months for your checking accounts, savings accounts, money market funds and other liquid assets. To avoid potential fraud, most loans require thorough paperwork to determine the source of all cash. Even for innocent reasons, transferring money or switching banks may make it harder for the lending institution to confirm your account history.

Don't give funds directly to your seller (generally in the case of of "for sale by owner") to be considered a "good faith" deposit. As a rule, your earnest money belongs to you, not the seller up until the deal closes. Although some FSBO sellers might not understand this, the good faith funds should go toward the buyer's closing expenses. Get a lawyer or other neutral person who will hang on to the funds or put them in a trust account until you close. If your sale falls through, your purchase contract should indicate to whom this earnest money should go.

Asset Alliance Mortgage can walk you through the pitfalls of getting a mortgage. Call us: (760) 632-7701.

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