Don't Trip Yourself up While Buying your Home

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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 loan is approved. Until your loan closes, there are still some hoops to jump through. We have listed some actions below we suggest you avoid when waiting for your loan to close.

Don't make expensive purchases. Although you may be planning ways to turn your new home into a castle, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you keep away from vacations and car purchases until the closing of your loan. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. Using cash to buy expensive items can even be a mistake: many lending institutions consider your available cash when approving your application.

Don't go on a career search. Lenders look for a consistent career history on your application. Finding a new career (particularly one with a bigger salary) may not hinder your ability to qualify for your mortgage loan. However, if you switch careers before you qualify, your mortgage process could fail or be stalled.

Don't change banks or move cash around in your bank accounts. Bank statements from the last few months for accounts in your name (checking, savings, money market, and other accounts) will probably be studied as the lender makes decisions regarding your loan application. To eliminate fraud, lenders look for a consistent portrayal of how you earn your living and where additional funds come from. Even for innocent reasons, transferring cash or switching banks may make it difficult for the lending institution to verify your bank history.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's until closing. Your good faith money is to go toward your expenses upon closing; your individual seller might not know this. Find a lawyer or other neutral party who will hang on to the deposit or put it in a trust account until you close. The contract should specify who keeps the money if the transaction falls through.

American Dream Mortgage can walk you through the pitfalls of getting a mortgage. Call us: (720) 317-2500.

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