Don't Trip Yourself up While Buying a Home

Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves the loan. It's best to remember that until you get the keys, your lender is watching your finances very closely. Here are some things to refrain from during the home buying process to be sure the transaction goes well.

Don't overspend on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from big purchases like furniture, cars, appliances, or vacations until the loan closes. Your credit numbers could change suddenly if you make a huge purchase using plastic. It's also a mistake to make those large purchases with cash. Lending Institutions are looking at your cash on hand when considering your loan.

Don't go on a job search. Stability in your work history is a good thing to lenders. Getting a new career before you start the application process for a mortgage loan may not jeopardize your approval at all. But for some people, getting a new career during the mortgage application process may bring concern and hinder your application.

Don't move finances around or change banks. As your lender considers your mortgage loan package, you will likely be required to provide bank statements for recent months for your saving and checking accounts, money market accounts and other liquid wealth. Your lender hopes to see a consistent flow of your money each month, in the interest of ruling out fraud. Changing banks or transferring money to another account - no matter the reason - might make it difficult for the lender to verify your funds.

Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it is actually yours until closing. The earnest money is to go toward your expenses upon closing; some FSBO sellers might not understand this. We recommend that you put the money into a trust account, or get a neutral party, like an attorney, to hold it until the closing of the sale. Should your home purchase fail, the contract with the seller should dictate where your earnest money should go.

At Halpern & Associates Mortgage Corporation, we answer questions about this process every day. Call us: (305) 535-2230.

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