Things to Avoid While Buying a New Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. It's best to remember that until you get the keys, your lender is watching your finances very closely. We have given you a list of actions below we suggest you stay away from when waiting for closing.

Don't throw your money around. Although you will be listing ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and car purchases until the closing of your loan. Your credit numbers could change suddenly if you purchase new furniture using credit cards. Using cash to purchase big-ticket items can even create a problem: most banks look at your available cash when approving your mortgage.

Don't look for a new career. Your recent work history should show consistency. Getting a new career before you apply for a mortgage may not get in the way of your approval at all. But for some people, getting a new job during the loan approval process might bring concern and hinder your approval.

Don't switch your accounts to a new bank or move around your cash. Bank statements from recent months for accounts in your name (checking, savings, money market, and other assets) will be reviewed as the lender considers your approval. The lender hopes to see a steady rise and fall of your money over the pay period, in the interest of ruling out fraud. Changing banks or moving funds elsewhere - for whatever purpose - may hinder the review of your funds.

Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your earnest money is yours, not the seller's up until closing. Although some individual sellers might not realize this, your earnest money should be used for your closing expenses. We recommend that you put the funds into a trust account, or get a neutral person, like an attorney to hold them until the closing of the sale. Your contract should dictate who gets the earnest funds if the transaction falls through.

At Executive Lending Group, we answer questions about this process every day. Call us at 4056158543.