Don't Trip Yourself up While Buying a New Home

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Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the loan is approved. Until your keys are in hand, there still remain some hurdles to jump. We have given you a list of actions below we suggest you stay away from when waiting for your loan to close.

Don't throw your money around. You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but stay away from big purchases like furniture, jewelry, appliances, or vacations until closing. Your lender may send up red flags if you finance your furniture on your credit cards in the middle of your loan process. It's also a bad idea to make those big purchases using cash. Lending Institutions are looking at your cash reserve when considering your loan.

Don't get a new career. Lenders like to see a consistent work history on your application. Getting a new job may not jeopardize your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. But in some cases, getting a new career during the mortgage loan application process may raise concern and stymie your approval.

Don't change banks or move cash around in your bank accounts. Bank statements from the last few months for accounts in your name (savings, checking, money market, and others) will be analyzed as the lender considers your approval. To avoid potential fraud, most lenders need a thorough paper trail to document the source of all cash. Changing banks or transferring finances elsewhere - even if its merely to pool funds - could hinder the review of your funds.

Don't give cash directly to your seller (commonly in the case of of "for sale by owner") to be considered earnest money. As a rule, your good faith deposit belongs to you, not to the seller up until the sale is final. Some sellers may not know that these good faith funds should be used for your expenses upon closing. Find an attorney or other neutral person who can hold the money or place it in a trust account until closing. The contract should indicate who keeps the money if the home purchase does not go through.

Cascade Valley Mortgage can answer questions about these "Don'ts" and many others. Give us a call at 425-396-3130.