Things to Avoid While Purchasing a New Home

What's better than getting a bunch of new furniture to go in your future home? Nothing. But buying big ticket items before your loan closes could be trouble. Until closing, there still remain some hoops to jump through. We have listed some things below you will want to stay away from when waiting for closing.

Don't buy luxury items. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but stay away from big purchases like furniture, cars, appliances, or vacations until your loan closes. You may send up red flags with your lender if you buy your furniture on your credit cards during your loan process. Using cash to buy expensive items can even create a mistake: most lenders consider your available cash when approving your mortgage.

Don't go on a career search. Lending Institutions feel comfortable seeing a consistent work history on your application. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are going to be making more money. However, switching careers during the approval process could affect whether or not you are approved.

Don't move cash around or switch banks. As the lending institution reviews your loan application, you will likely be asked to provide bank statements for the last few months on your checking and savings accounts, money market accounts and other liquid finances. Your lender is looking for a consistent flow of your money over the pay period, in order to rule out fraud. No matter the reason, moving banks or transferring funds may raise a red flag with the lender and slow your application process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. As a rule, your good faith deposit belongs to you, not the seller until closing. Although some FSBO sellers might not know this, any earnest money should be applied to the buyer's closing expenses. An attorney or other type of neutral party can hold your deposit, or you may put it temporarily into a trust account until closing. The final disposition of good faith money, if your transaction fails, should be included in the contract with your seller.

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