Things to Avoid While Buying a Home

Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the loan is approved. It's best to remember that until closing, your lender is watching your accounts very closely. Here are some actions to refrain from before closing to assure your transaction goes well.

Don't buy luxury items. It may be tempting to buy that new couch for the soon-to-be-yours den, but it's advisable to avoid making major buys like furniture, appliances, jewelry, or vacations until closing. Using plastic to buy new living room furniture could compromise your lending process by changing your numbers dramatically. It's also a mistake to make those large purchases using cash. Lending Institutions are looking at your available cash when considering your loan.

Don't get a new career. Your recent career history should show consistency. Getting a new job before you apply for a mortgage may not get in the way of your approval at all. But for some, changing jobs during the mortgage approval process may raise concern and hinder your approval.

Don't change banks or move money around in your accounts. Your lender will require you to produce recent bank statements for all of your accounts: checking, savings, money market, and other assets. Your lender is looking for a steady flow of your funds over the pay period, in order to avoid fraud. Changing banks or transferring funds elsewhere - no matter the reason - could make it harder for the lender to verify your funds.

Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until closing, any good faith deposit actually belongs to you. Your good faith money is to be applied to your expenses upon closing; the FSBO seller may not understand this. It's best to put the money into a trust account, or get an attorney to hold it until closing. Your purchase contract should specify who keeps the deposit if the transaction fails.

Patricia Kotz can walk you through the pitfalls of getting a mortgage. Call us: 970-984-2766.

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