Things to Avoid While Purchasing a New Home

What's better than getting a bunch of new furnishings to adorn your future home? Not much. But buying big ticket items before closing can be a mistake. Keep in mind that until you get the keys, your lender is watching your accounts very closely. Below you'll find a list of actions to avoid during this crucial time of your home purchase.

Don't empty your wallet on big-ticket items Although you will be dreaming of ways to turn your new house into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and vehicle purchases until the closing of your loan. Financing your bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Using cash to purchase big-ticket items can even be an issue: many banks take into consideration your available cash when approving your loan.

Don't look for a new job. Your recent career history should show consistency. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - especially if you are improving your salary. However, if you switch careers before approval, your process could fail or be bogged down.

Don't change banks or move cash around in your accounts. As your lender considers your loan package, you will probably be instructed to provide bank statements for recent months for your checking accounts, savings accounts, money market accounts and other liquid assets. To eliminate fraud, lenders look for clear documentation of how you earn your living and where additional wealth comes from. Changing banks or transferring finances to another account - no matter the purpose - might make it harder for the lender to review your funds.

Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money belongs to you, not to the seller up until the deal closes. Although some individual sellers might not know this, the good faith money should be applied to the buyer's closing expenses. It's wise to put the deposit into a trust account, or get an attorney to hold it until closing. The purchase agreement should indicate to whom the deposit goes if the home purchase fails.

At Bob Rutledge Mortgage, we answer questions about this process every day. Give us a call at 3149139678.