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 error of carrying their enthusiasm straight to the mall or furniture store. Until closing, there still remain some hoops to jump through. Here are some actions to avoid before closing to assure your transaction goes well.

Don't buy big-ticket items. You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but keep away from expensive purchases like furniture, cars, appliances, or vacations until your loan closes. Your credit numbers could change suddenly if you purchase new furniture using credit cards. It's even a bad idea to make those huge purchases with cash. Lenders are looking at your cash on hand when considering your loan.

Don't look for a new career. Your recent job history should show stability. Finding a new career (especially one with a bigger paycheck) may not change your ability to qualify for your mortgage loan. However, if you switch careers before your loan is approved, your loan process could fail or be stalled.

Don't move finances around or change banks. While your lender considers your mortgage application, you will likely be instructed to provide bank statements for recent months on your checking accounts, savings accounts, money market accounts and other liquid finances. In order to detect fraud, lenders require clear documentation of how you earn your living and where additional wealth comes from. Changing banks or transferring money elsewhere - no matter the reason - could make it harder for your lender to verify your funds.

Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. Although some individual sellers may not understand this, your earnest money should be applied to the buyer's closing expenses. 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 final disposition of earnest funds, if your home purchase falls through, should be documented in the purchase agreement with your seller.

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