Don't Trip Yourself up While Buying a Home

Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves their loan. There are still a few major hurdles to jump before the keys are handed over. Here are some actions to avoid during the home buying process to be sure the transaction goes well.

Don't overspend on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from major purchases like furniture, jewelry, appliances, or vacations until your loan closes. Financing new stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Using cash to buy big-ticket items can even create an issue: most lenders look at your available cash when approving your mortgage.

Don't get a new career. Stability in your career history is a positive thing to lending institutions. Getting a new job before you start the application process for a loan may not jeopardize your approval at all. However, if you switch careers before your loan is approved, your mortgage process could fail or be slowed down.

Don't take your accounts to a new bank or move around your money. Bank statements from the last two or three months for accounts in your name (savings, checking, money market, and other assets) will probably be studied as the lender makes decisions regarding your mortgage application. To eliminate potential fraud, most lenders require thorough paperwork to determine the source of all incoming funds. Even for practical reasons, moving around money or changing banks might make it difficult for your lender to document your bank history.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. As a rule, your good faith deposit belongs to you, not to the seller up until closing. Although your seller may not realize this, any earnest money should be applied to the buyer's closing expenses. An attorney or other type of neutral party can hold your earnest funds, or you may put them temporarily into a trust account until closing. The purchase agreement should document who keeps the money if the home purchase fails.

Riviera Funding NMLS#861382 CA DRE Broker #01186669 can answer questions about these "Don'ts" and many others. Give us a call: 3103737406.