Don't Trip Yourself up While Buying your Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. Keep in mind that until your keys are in hand, your lender is watching you very closely. Here are some things to avoid during the home buying process to assure the transaction goes smoothly.

Don't buy big-ticket items. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until the loan closes. Your credit numbers could change suddenly if you make a huge purchase using plastic. Using cash to purchase big-ticket items can also create a mistake: many lenders look at your available cash when approving your loan.

Don't get a new job. Consistency in your job history is a good thing to lending institutions. Getting a new career before you start the application process for a mortgage loan may not jeopardize your approval at all. But for some, changing jobs during the mortgage loan application process may bring concern and affect your application.

Don't move cash around or change banks. As your lending institution reviews your mortgage loan package, you will probably be required to produce bank statements for recent months on your checking and savings accounts, money market accounts and other liquid wealth. In order to avoid fraud, lenders will need clear documentation of how you earn your living and where additional funds come from. No matter the purpose, changing banks or transferring money could raise a red flag with your lender and slow your approval process.

Don't give funds directly to your seller (usually in the case of of "for sale by owner") to be used as a "good faith" deposit. Your good faith money does not belong to the seller: it remains yours until the sale closes. Your good faith funds are to be applied to your expenses upon closing; your individual seller may not understand this. Find a lawyer or other neutral party who can hang on to the funds or put them in a trust account until you close. The purchase agreement should indicate who keeps the deposit if the transaction falls through.