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. Until the house is really yours, there still remain some hurdles to jump. We have listed some things below we suggest you stay away from when waiting for your loan to close.

Don't overspend on big-ticket items You may be tempted to order that new Turkish rug for the soon-to-be-yours parlor, but it's advisable to avoid making big ticket buys like furniture, appliances, jewelry, or vacations until your home loan closes. Financing new bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. It's also a bad idea to make those large purchases with cash. Lenders are examining your cash on hand when considering your loan.

Don't get a new job. Lending Institutions feel comfortable seeing a consistent job history on your application forms. Changing jobs may not affect your ability to qualify for a mortgage loan - particularly if you are going to be making more money. However, getting a new career in the middle of your application process may influence your approval.

Don't change banks or move finances around in your accounts. As the lender reviews your mortgage loan package, you will likely be instructed to submit bank statements for the last two or three months on your saving and checking accounts, money market accounts and other liquid wealth. To avoid potential fraud, most loans want a thorough paper trail to document the source of all incoming funds. Switching banks or moving finances to another account - even if its only to consolidate funds - could hinder the documentation of your accounts.

Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. As a rule, your good faith deposit belongs to you, not to the seller until the deal closes. Your seller might not know that the good faith money is to be applied to your expenses upon closing. A neutral party, like an attorney can hang onto your deposit, or you may put it temporarily into a trust account until you close. The purchase contract should dictate where the deposit goes if the home purchase falls through.

Family Mortgage Company of Hawaii, Inc. NMLS #244497 can answer questions about these "Don'ts" and many others. Give us a call at (808) 935-0678.