Don't Trip Yourself up While Buying a Home

What's more fun than getting a bunch of new stuff to adorn your future home? Not much. But making big ticket purchases before your loan closes could be trouble. Until the house is really yours, there are still some hurdles to jump. Below you'll find a list of actions to stay away from during this critical time of your home purchase.

Don't throw your money around. You may be itching to buy that new easy-chair for the soon-to-be-yours living room, but it's best to stay away from making big ticket purchases like furniture, appliances, jewelry, or cars until closing. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. It's even a bad idea to make those big purchases using cash. Lenders are examining your available cash when considering your loan.

Don't go on a job search. Consistency in your career history is a positive thing to lending institutions. Finding a new career (particularly one with a better paycheck) may not hinder your ability to qualify for a loan. However, if you switch careers before your loan is approved, your process could fail or be bogged down.

Don't move cash around or switch banks. Your lender will ask for recent bank statements of your accounts: savings, checking, money market, and other liquid assets. To eliminate potential fraud, most lenders need thorough paperwork to document the source of all incoming funds. Even for practical reasons, transferring cash or switching banks may make it difficult for your lender to verify your bank history.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Some sellers may not realize that the earnest money is to go toward your expenses upon closing. Find an attorney or other neutral person who will hang on to the funds or put them in a trust account until you close. The final disposition of good faith funds, if your sale falls through, should be written in the contract with your seller.

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