Don't Trip Yourself up While Buying your Home

Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the lender approves the loan. It's wise to remember that until you get the keys, your lender is watching your accounts very closely. We have given you a list of 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 showplace, try to stay away from major purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and vehicle purchases until your loan closes. Your credit numbers could change suddenly if you make a huge purchase using plastic. It's also a bad idea to make those big purchases with cash. Lending Institutions are examining your available cash when considering your loan.

Don't look for a new career Consistency in your job history is a positive thing to banks and other lenders. Getting a new job may not compromise your ability to qualify for a mortgage loan - especially if you are going to be making more money. But for some, changing jobs during the mortgage loan approval process could raise concern and stymie your approval.

Don't switch your accounts to a new bank or move around your money. As the lending institution considers your mortgage loan application, you will likely be asked to submit bank statements for the last two or three months for your checking and savings accounts, money market accounts and other liquid finances. To detect potential fraud, most lenders need detailed paperwork to document the source of all incoming funds. Even for practical purposes, transferring cash or switching banks may make it more difficult for the lending institution to verify your account history.

Don't give cash directly to your seller (commonly in cases of "for sale by owner") to be used as earnest money. As a rule, your good faith deposit belongs to you, not the seller up until the deal closes. The good faith money is to go toward your expenses upon closing; some individual sellers might not understand this. An attorney or other type of neutral party can hold your earnest funds, or you may place them temporarily into a trust account until closing. If your transaction fails, the purchase contract should document where this earnest money should go.