Don't Trip Yourself up While Buying your Home

With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. Keep in mind that until closing, your lender is watching your finances very closely. We have given you a list of actions below you will want to avoid when waiting for your loan to close.

Don't buy big-ticket items. Although you will be listing ways to turn your new house into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and vehicle purchases until your loan closes. You may send up red flags with your lender if you finance new appliances on your credit cards in the middle of your loan process. Because lenders are reviewing your bank accounts, a large cash purchase is also not advised.

Don't go on a job search. Lenders look for a consistent career history on your application forms. Finding a new job (especially one with a bigger paycheck) may not change your ability to qualify for your mortgage. However, switching careers during your application process might influence your approval.

Don't take your accounts to a new bank or move around your cash. Bank statements from recent months for accounts in your name (savings, checking, money market, and other assets) will likely be studied as the lending institution considers your approval. To eliminate potential fraud, most lending institutions want a thorough paper trail to document the source of all funds. Changing banks or moving funds elsewhere - no matter the purpose - may hinder the review of your funds.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Your good faith deposit does not belong to the seller: it is actually yours until closing. Although your FSBO seller might not know this, the good faith funds should be applied to your closing expenses. We recommend that you put the funds into a trust account, or get a neutral party, like a lawyer to hold them until closing. The disposition of earnest money, in the case of a failed transaction, should be documented in the purchase agreement with your seller.

Mortgage Headquarters of Missouri, Inc can answer questions about these "Don'ts" and many others. Give us a call: 5733029990.