Don't Trip Yourself up While Buying a New Home

What's better than getting a bunch of new furnishings to adorn your future home? Nothing. But buying big ticket items before your loan closes can be an error. There still remain a few major hurdles to jump before the house is realy yours. Here are some things to refrain from before closing to be sure your transaction goes well.

Don't make expensive purchases. You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but stay away from big purchases like furniture, cars, appliances, or vacations until your loan closes. Using plastic to buy new living room furniture could compromise your lending process by changing your numbers dramatically. It's also a bad idea to make those large purchases with cash. Lenders are looking at your cash on hand when considering your loan.

Don't look for a new career. Lending Institutions look for a consistent career history on your application forms. Changing jobs may not compromise your ability to qualify for a mortgage loan - particularly if you are improving your salary. However, if you switch careers before your loan is approved, your process could fail or be bogged down.

Don't switch banks or move money around in your accounts. As the lender considers your mortgage loan application, you will likely be instructed to produce bank statements for the last two or three months for your saving and checking accounts, money market accounts and other liquid finances. To eliminate fraud, lenders want to see clear documentation of how you earn your living and where additional funds come from. Even for innocent purposes, moving around money or changing banks could make it harder for the lending institution to document your account history.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Until the completion of the deal, any good faith deposit remains yours. The FSBO seller might not realize that your good faith money should go toward your expenses upon closing. We recommend that you put the funds into a trust account, or get an attorney to hold them until the closing of the sale. If your sale falls through, your contract with the seller should dictate to whom this earnest money should go.

Bob Rutledge Mortgage can walk you through the pitfalls of getting a mortgage. Call us: 3149139678.