Don't Trip Yourself up While Buying your Home

With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. Until the house is really yours, there still remain some hoops to jump through. Here are some things to stay clear of before closing to be sure your transaction goes smoothly.

Don't overspend on big-ticket items You may be itching to buy that new sofa for the soon-to-be-yours parlor, but it's advisable to avoid making large purchases 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 jeopardize your credit worthiness when you need it the most. Using cash to purchase big-ticket items can even be a bad idea: most banks take into consideration your available cash when approving your loan.

Don't look for a new career. Your recent career history should show stability. Getting a new career before you apply for a mortgage may not get in the way of your approval at all. However, switching careers in the middle of the approval process might affect whether or not you are approved.

Don't switch your accounts to a new bank or move around your cash. As the lending institution considers your mortgage application, you will probably be instructed to provide bank statements for recent months on your saving and checking accounts, money market accounts and other liquid wealth. Your lending institution hopes to see a steady flow of your funds each month, in the interest of ruling out fraud. Even for practical purposes, transferring money or switching banks may make it harder for your lending institution to verify your bank history.

Don't give money directly to your seller (generally in the case of of "for sale by owner") to be used as earnest money. As a rule, your good faith deposit belongs to you, not to the seller up until the sale is final. Your seller might not know that your good faith funds must be applied to your expenses upon closing. Get an attorney or other neutral person who will hang on to the funds or put them in a trust account until closing. Should your home purchase fail, the purchase contract should specify to whom your good faith funds should go.

Stepping Stone Mortgage can answer questions about these "Don'ts" and many others. Call us: 5416833300.