Don't Trip Yourself up While Buying a Home

Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the loan is approved. Until your keys are in hand, there still remain some hurdles to jump. Below you'll find a list of things to stay away from during this critical time of your home purchase.

Don't overspend on big-ticket items You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until your loan closes. Your lender may send up red flags if you purchase new electronics on your credit cards in the middle of your loan process. It's even a red flag to make those large purchases with cash. Lending Institutions are looking at your cash reserve when considering your loan.

Don't get a new career. Lending Institutions like to see a consistent work history on your paperwork. Getting a new career before you start the application process for a loan may not affect your approval at all. But for some people, switching jobs during the mortgage loan approval process might raise concern and stymie your approval.

Don't change banks or move cash around in your bank accounts. As the lending institution considers your loan package, you will probably 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 wealth. To avoid potential fraud, most lenders want thorough paperwork to document the source of all cash. Even for practical purposes, transferring finances or changing banks could make it harder for your lender to document your bank history.

Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until closing, the earnest money remains yours. Although your seller may not realize this, the earnest money must be used for the buyer's closing expenses. Find a lawyer or other neutral person who can hang on to the deposit or put it in a trust account until you close. The final disposition of earnest funds, if your sale falls through, should be documented in the contract with your seller.

VSI Home Lending can answer questions about these "Don'ts" and many others. Call us at 2603382561.