Don't Trip Yourself up While Buying a New Home

Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the loan is approved. Keep in mind that until your keys are in hand, your lender is watching your finances very closely. We have listed some things below we suggest you stay away from when waiting for closing.

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 castle, but stay away from expensive purchases like furniture, cars, appliances, or vacations until your loan closes. Using plastic to buy new living room furniture could compromise your lending process by distorting your numbers. It's even a bad idea to make those big-ticket purchases with cash. Lending Institutions are examining your cash reserve when considering your loan.

Don't look for a new job. Lending Institutions like to see a consistent work history on your application forms. Getting a new career before you apply for a loan may not compromise your approval at all. But in some cases, switching jobs during the mortgage application process may bring concern and hinder your application.

Don't switch your accounts to a new bank or move around your finances. Bank statements from recent months for accounts in your name (savings, checking, money market, and other accounts) will be analyzed as the lender makes decisions regarding your approval. To eliminate potential fraud, most lenders need thorough paperwork to determine the source of all cash. Even for innocent reasons, transferring money or changing banks could make it more difficult for the lender to document your account history.

Don't give funds directly to your seller (usually in cases of "for sale by owner") to be considered earnest money. Until closing, the earnest money actually belongs to you. Your seller may not realize that any earnest money should go toward your expenses upon closing. A neutral party, like an attorney can hold your earnest money, or you may put it temporarily into a trust account until closing. The disposition of good faith money, in the case of a failed transaction, should be indicated in the contract with your seller.

Omni Mortgage Corp. can answer questions about these "Don'ts" and many others. Call us: 7184417000.