Don't Trip Yourself up While Buying your New Home

Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the lender approves the loan. It's best to remember that until closing, your lender is watching your finances very closely. We have given you a list of things below we suggest you avoid when waiting for closing.

Don't empty your wallet on big-ticket items Although you will be listing ways to turn your new home into a showplace, 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. Financing your furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. It's even a mistake to make those large purchases using cash. Lenders are looking at your cash on hand when considering your loan.

Don't get a new career. Your recent work history should show consistency. Getting a new career before you apply for a mortgage loan may not jeopardize your approval at all. However, if you switch careers before approval, your loan process could fail or be stalled.

Don't take your accounts to a new bank or move around your money. Your lending institution will ask for recent bank statements of accounts in your name: savings, checking, money market, and other liquid assets. Your lending institution looks for a steady rise and fall of your money over the month, in the interest of avoiding fraud. No matter the reason, switching banks or moving money from one account to another can raise a red flag with your lender and slow down your approval process.

Don't give cash directly to your seller (commonly in cases of "for sale by owner") to be used as a "good faith" deposit. As a rule, your good faith money belongs to you, not to the seller until the sale is final. Your seller may not realize that your good faith money must be used for your expenses at closing. An attorney or other type of neutral party can hold onto your deposit, or you may put it temporarily into a trust account until you close. The disposition of earnest money, in the case of a failed transaction, should be specified in the contract with your seller.

At Integrated Financial Solutions, LLC, we answer questions about this process every day. Call us: 4104614043.