Don't Trip Yourself up While Buying your Home

Lots of new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the loan is approved. Until your keys are in hand, there are still some hoops to jump through. Here are some things to stay clear of during the home buying process to be sure the transaction goes well.

Don't empty your wallet on big-ticket items Although you will be planning ways to turn your new house into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and vehicle 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 create a problem: many lending institutions take into consideration your cash reserve when approving your mortgage.

Don't get a new job. Your recent job history should show stability. Getting a new career before you apply for a loan may not compromise your approval at all. However, switching jobs in the middle of the application process could affect whether or not you are approved.

Don't move money around or switch banks. Your lending institution will require you to provide recent bank statements on all of your accounts: checking, savings, money market, and other assets. Your lending institution looks for a steady flow of your funds each pay period, in order to avoid fraud. Even for innocent purposes, moving around finances or changing banks could make it difficult for your lender to confirm your bank history.

Don't give 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. Although some FSBO sellers may not know this, any good faith funds must go toward your closing expenses. A neutral party, like an attorney can hold your deposit, or you may put it temporarily into a trust account until closing. Your contract should dictate where the deposit goes if the transaction fails.