Don't Trip Yourself up While Buying a Home

With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. It's best to remember that until you get the keys, your lender is watching your finances very closely. Below you'll find a list of things to avoid during this crucial time of your home purchase.

Don't empty your wallet 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 expensive purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could change suddenly if you purchase new furniture using plastic. Using cash to purchase big items can also be a bad idea: many lenders take into consideration your cash on hand when approving your loan.

Don't get a new job. Lenders like to see a consistent career history on your application. Getting a new job before you apply for a loan may not compromise your approval at all. However, getting a new job in the middle of your loan process might affect whether or not you are approved.

Don't move money around or change banks. As your lending institution considers your mortgage package, you will likely be instructed to provide bank statements for recent months for your checking accounts, savings accounts, money market funds and other liquid finances. The lender looks for a consistent flow of your funds over the month, in the interest of avoiding fraud. Changing banks or moving funds to another account - no matter the purpose - may make it harder for your lender to review your funds.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, any good faith deposit actually belongs to you. The good faith funds are to be applied to your expenses upon closing; a FSBO seller might not realize this. A neutral party, like an attorney can hold onto your earnest money, or you may put it temporarily into a trust account until closing. If your sale falls through, your purchase agreement should document where the good faith funds should go.

Riviera Funding can answer questions about these "Don'ts" and many others. Give us a call: (310) 373-7406.

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