Don't Trip Yourself up While Buying a New Home

With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. Until the keys are handed over, there still remain some hoops to jump through. We have listed some actions below you will want to avoid when waiting for closing.

Don't buy luxury items. You may be tempted to buy that new Turkish rug for the soon-to-be-yours parlor, but it's advisable to avoid making big ticket buys like furniture, appliances, electronic equipment, or cars until closing. Using credit cards to buy furniture could compromise your lending process by distorting your numbers. Using cash to purchase big-ticket items can also be a bad idea: many banks look at your available cash when approving your application.

Don't go on a career search. Stability in your career history is a positive thing to lenders. Finding a new job (especially one with a better salary) may not jeopardize your ability to qualify for a loan. But for some people, changing careers during the loan application process might raise concern and hinder your application.

Don't take your accounts to a new bank or move around your cash. While your lending institution considers your mortgage application, you will probably be required to provide bank statements for the last few months on your checking accounts, savings accounts, money market accounts and other liquid assets. The lender needs to see a steady flow of your funds over the pay period, in order to avoid fraud. Even for practical reasons, moving around cash or changing banks might make it harder for the lender to verify your account history.

Don't give cash directly to your seller (usually in cases of "for sale by owner") to be used as earnest money. Until the sale is complete, the good faith deposit remains yours. The earnest money is to go toward your expenses upon closing; some sellers might not realize this. We recommend that you put the deposit into a trust account, or get a neutral party, like a lawyer, to hold it until the closing of the sale. The disposition of earnest money, if your transaction fails, should be specified in the purchase agreement with your seller.

Channel Mortgage LLC can walk you through the pitfalls of getting a mortgage. Give us a call at 7186399500.

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Channel Mortgage LLC

Connecting the Dots to Home Ownership

55-25 69th Street 1st Floor
Maspeth, NY 11378-1806