Don't Trip Yourself up 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 furniture store. It's wise to remember that until your keys are in hand, your lender is watching your accounts very closely. Below you'll find a list of things to avoid during this crucial time of your home purchase.

Don't throw your money around. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from big purchases like furniture, jewelry, appliances, or vacations until your loan closes. Using credit cards 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. Your recent job history should show stability. Getting a new career before you apply for a mortgage loan may not get in the way of your approval at all. However, switching jobs during your loan process could affect your approval.

Don't switch your accounts to a new bank or move around your money. Your lender will require you to produce recent bank statements on all of your accounts: checking, savings, money market, and other assets. To eliminate fraud, lenders will need clear documentation of how you earn your money and where any additional funds come from. No matter the purpose, changing banks or transferring money can raise a red flag with your lender and impede your loan process.

Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Until closing, any good faith deposit actually belongs to you. Your earnest money is to be applied to your expenses closing; some sellers might not realize this. We recommend that you put the funds into a trust account, or get a neutral party, like a lawyer to hold them until closing. The final disposition of earnest money, in the case of a failed transaction, should be written in the contract with the seller.

Family Mortgage Company of Hawaii, Inc. NMLS #244497 can walk you through the pitfalls of getting a mortgage. Give us a call at (808) 935-0678.