Don't Trip Yourself up While Buying a New Home

Many 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 the loan. It's wise to remember that until your keys are in hand, your lender is watching your accounts very closely. Below you'll find a list of actions to avoid during this critical time of your home purchase.

Don't buy big-ticket items. It may be tempting to buy that new couch for the soon-to-be-yours parlor, but it's advisable to stay away from making large purchases like furniture, appliances, jewelry, or cars until your home loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. It's also a mistake to make those big purchases with cash. Lending Institutions are examining your cash on hand when considering your loan.

Don't look for a new career. Stability in your career history is a good thing to banks and other lenders. Changing jobs may not affect your ability to qualify for a loan - especially if you are going to be making more money. However, if you switch careers before your loan is approved, your loan process could fail or be stalled.

Don't switch your accounts to a new bank or move around your cash. Your lender will require you to provide recent bank statements for accounts in your name: savings, checking, money market, and other liquid assets. To detect fraud, lenders require a clear and consistent picture of how you earn your money and where any additional money comes from. Changing banks or moving money to another account - no matter the reason - could make it harder for your lender to document your funds.

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 until closing. Although your seller may not realize this, your good faith money should be used for your closing expenses. We recommend that you put the money into a trust account, or get a neutral party, like a lawyer, to hold it until the deal closes. The contract should specify to whom the funds go if the transaction fails.

At Riviera Funding NMLS#861382 CA DRE Broker #01186669, we answer questions about this process every day. Give us a call at 3103737406.