Don't Trip Yourself up While Buying your New Home

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Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the loan is approved. It's best to remember that until your keys are in hand, your lender is watching you very closely. We have given you a list of things below we suggest you stay away from when waiting for your loan to close.

Don't empty your wallet on big-ticket items You may be tempted to order that new easy-chair for the soon-to-be-yours parlor, but it's best to avoid making big ticket buys like furniture, appliances, jewelry, or vacations until closing. Using plastic to buy furniture could jeopardize your lending process by distorting your numbers. Using cash to buy expensive items can also create an issue: many banks look at your available cash when approving your application.

Don't look for a new career. Lending Institutions feel comfortable seeing a consistent job history on your application forms. Finding a new job (particularly one with a bump in salary) may not change your ability to qualify for your mortgage loan. However, if you switch careers before you qualify, your process could fail or be slowed down.

Don't change banks or move cash around in your bank accounts. As your lender reviews your loan package, you will probably be required to provide bank statements for the last two or three months on your saving and checking accounts, money market accounts and other liquid assets. Your lending institution looks for a consistent rise and fall of your money each pay period, in the interest of avoiding fraud. Switching banks or moving funds elsewhere - no matter the reason - may make it harder for your lender to verify your funds.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. As a rule, your good faith deposit belongs to you, not to the seller up until the deal closes. Your good faith funds are to go toward your expenses closing; the FSBO seller may not understand this. Get a lawyer or other neutral person who is able to hang on to the money or place it in a trust account until you close. The disposition of earnest money, if your transaction falls through, should be specified in the purchase agreement with your seller.

Tyler Home Mortgage can answer questions about these "Don'ts" and many others. Give us a call at (903) 630-7049.

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