Don't Trip Yourself up While Buying your New Home

Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the lender approves their loan. It's best to remember that until your keys are in hand, your lender is watching your accounts very closely. Here are some actions to stay clear of during the home buying process to be sure the transaction goes smoothly.

Don't make expensive purchases. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but keep away from big purchases like furniture, cars, appliances, or vacations until the loan closes. Using plastic to buy furniture could jeopardize your lending process by distorting your numbers. Since lending institutions are examining your financial accounts, a large cash purchase is also not advised.

Don't get a new career. Your recent job history should show stability. Finding a new job (particularly one with a bump in salary) may not jeopardize your ability to qualify for a mortgage. But for some people, getting a new job during the mortgage loan approval process might raise concern and affect your approval.

Don't change banks or move finances around in your bank accounts. As the lending institution reviews your mortgage loan application, you will probably be required to produce bank statements for the last two or three months for your saving and checking accounts, money market accounts and other liquid wealth. To eliminate fraud, lenders will need a consistent portrayal of how you earn your money and where any additional money comes from. Even for practical reasons, moving around money or changing banks may make it harder for your lending institution to confirm your bank history.

Don't give cash directly to your seller (commonly in the case of of "for sale by owner") to be considered a "good faith" deposit. Until the completion of the deal, any good faith money actually belongs to you. Although your FSBO seller may not know this, any good faith funds must go toward your closing expenses. Find a lawyer or other neutral party who will hang on to the deposit or put it in a trust account until you close. If your sale falls through, the contract with the seller should dictate to whom the good faith funds should go.

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