Don't Trip Yourself up While Buying your New Home

Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the lender approves the loan. Until your loan closes, there still remain some hoops to jump through. Below you'll find a list of actions to stay away from during this critical time of your home purchase.

Don't empty your wallet on big-ticket items You may be tempted to buy that new Turkish rug for the soon-to-be-yours parlor, but it's best to stay away from making major buys like furniture, appliances, jewelry, or vacations until closing. Financing new bedroom furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Using cash to purchase expensive items can also be an issue: most lenders look at your available cash when approving your mortgage loan.

Don't get a new job. Your recent job history should show consistency. Getting a new job may not jeopardize your ability to qualify for a loan - particularly if you are going to be making more money. But for some people, switching jobs during the loan application process could bring concern and hinder your application.

Don't take your accounts to a new bank or move around your finances. Bank statements from the last two or three months for all of your accounts (savings, checking, money market, and other accounts) will be studied as the lender makes decisions regarding your approval. Your lending institution needs to see a steady rise and fall of your money each month, in order to rule out fraud. No matter the purpose, changing banks or moving funds from one account to another can raise a red flag with the lender and slow your approval process.

Don't give cash directly to your seller (commonly in the case of of "for sale by owner") to be considered earnest money. Until the completion of the deal, any good faith deposit actually belongs to you. Your good faith funds are to be applied to your expenses closing; the FSBO seller may not know this. You'll want to put the money into a trust account, or get an attorney to hold it until closing. The disposition of good faith money, in the case of a failed transaction, should be included in the contract with your seller.

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