Don't Trip Yourself up While Buying a New Home

What's more fun than buying a bunch of new furnishings to adorn your future home? Not much. But buying big ticket items before closing can be an error. It's best to remember that until closing, your lender is watching your finances very closely. We have given you a list of actions below you will want to avoid when waiting for your loan to close.

Don't make expensive purchases. You may be tempted to buy that new sofa for the soon-to-be-yours living room, but it's best to stay away from making major purchases like furniture, appliances, electronic equipment, or vacations until your home loan closes. Financing new 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 create a problem: many lending institutions look at your available cash when approving your application.

Don't go on a career search. Lenders feel comfortable seeing a consistent work history on your paperwork. Finding a new career (especially one with a better paycheck) may not affect your ability to qualify for your mortgage. However, if you switch careers before your loan is approved, your loan process could fail or be stalled.

Don't change banks or move finances around in your accounts. As the lender 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 funds and other liquid wealth. In order to eliminate fraud, lenders want to see clear documentation of how you earn your living and where any additional funds come from. Even for innocent purposes, moving around finances or changing banks could make it difficult for your lending institution to document your bank history.

Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Until the completion of the deal, any good faith money actually belongs to you. Any earnest money is to be applied to your expenses closing; some sellers might not understand this. We recommend that you put the funds into a trust account, or get a neutral party, like an attorney to hold them until closing. The final disposition of good faith funds, in the case of a failed transaction, should be indicated in the purchase agreement with the seller.

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

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Bob Rutledge Mortgage

Loan Officer NMLS#: 297044

New American Funding 12321 Olive Blvd, ste 150
St. Louis, MO 63141