Don't Trip Yourself up While Buying a New Home

What's better than buying a bunch of new furnishings to go in your future home? Nothing. But making large purchases before closing could be trouble. Until the keys are handed over, there are still some hoops to jump through. We have listed some actions below you will want to avoid when waiting for closing.

Don't buy luxury items. You may be tempted to order that new sofa for the soon-to-be-yours den, but it's best to stay away from making large purchases like furniture, appliances, jewelry, or vacations until closing. Your credit numbers could change suddenly if you make a huge purchase using plastic. Because lending institutions are perusing your financial accounts, a large cash purchase is also a mistake.

Don't go on a career search. Stability in your career history is a positive thing to lending institutions. Finding a new career (especially one with a better salary) may not hinder your ability to qualify for your mortgage loan. But in some cases, switching jobs during the loan application process might raise concern and affect your application.

Don't move finances around or switch banks. While your lending institution reviews your loan application, you will probably be instructed to provide bank statements for the last two or three months for your checking and savings accounts, money market accounts and other liquid wealth. Your lender hopes to see a steady rise and fall of your money over the pay period, in order to avoid fraud. No matter the purpose, changing banks or moving funds from one account to another can raise a red flag with your lender and slow down your loan process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. As a rule, your earnest money belongs to you, not the seller until the sale is final. Although some FSBO sellers might not realize this, any good faith money must go toward your closing expenses. We recommend that you put the deposit into a trust account, or get a neutral party, like a lawyer, to hold it until closing. The contract should dictate where the funds go if the home purchase falls through.

VSI Home Lending can walk you through the pitfalls of getting a mortgage. Give us a call at 2603382561.