Don't Trip Yourself up While Buying your New Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. Until closing, there are still some hoops to jump through. Below you'll find a list of things to avoid during this critical time of your home purchase.

Don't throw your money around. You may be itching to buy that new easy-chair for the soon-to-be-yours living room, but it's advisable to avoid making large buys like furniture, appliances, electronic equipment, or vacations until closing. Your credit numbers could change suddenly if you purchase new furniture using credit cards. Using cash to buy big-ticket items can even create a bad idea: most lending institutions take into consideration your available cash when approving your mortgage loan.

Don't get a new job. Your recent job history should show stability. Getting a new job before you apply for a loan may not affect your approval at all. However, if you switch careers before your loan is approved, your process could fail or be bogged down.

Don't change banks or move finances around in your bank accounts. Your lending institution will ask for recent bank statements for accounts in your name: savings, checking, money market, and other liquid assets. To eliminate potential fraud, most lending institutions need detailed paperwork to document the source of all incoming funds. Changing banks or transferring finances elsewhere - even if its merely to pool funds - could hinder the review of your funds.

Don't give cash directly to your seller (commonly in the case of of "for sale by owner") to be considered a "good faith" deposit. Until closing, any earnest money remains yours. Although your FSBO seller may not realize this, the earnest money should go toward your closing expenses. A neutral party, like an attorney can hold your funds, or you may place them temporarily into a trust account until you close. The purchase agreement should specify who keeps the money if the home purchase fails.

At C2 Financial, we answer questions about this process every day. Give us a call: 805-636-9222.