Don't Trip Yourself up While Buying your Home

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. It's best to remember that until you get the keys, your lender is watching your finances very closely. Here are some actions to avoid before closing to be sure your transaction goes smoothly.

Don't empty your wallet on big-ticket items You may be itching to order that new sofa for the soon-to-be-yours den, but it's best to stay away from making large buys like furniture, appliances, jewelry, or vacations until closing. Using credit cards to buy new living room furniture could jeopardize your lending process by distorting your numbers. Using cash to purchase big items can even create a problem: most lending institutions take into consideration your available cash when approving your loan.

Don't get a new job. Your recent job history should show consistency. Getting a new job may not compromise your ability to qualify for a mortgage loan - especially if you are improving your salary. However, if you switch careers before approval, your mortgage process could fail or be stalled.

Don't move cash around or switch banks. As the lending institution considers your loan package, you will likely be instructed to submit bank statements for the last few months on your saving and checking accounts, money market accounts and other liquid assets. Your lending institution needs to see a consistent flow of your funds each month, in the interest of avoiding fraud. Switching banks or moving money to another account - for whatever reason - could make it harder for your lender to review your funds.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until closing, the good faith deposit actually belongs to you. The good faith money is to be used for your expenses closing; some FSBO sellers might not know this. We recommend that you put the deposit into a trust account, or get a neutral party, like a lawyer, to hold it until closing. The purchase contract should indicate where the deposit goes if the home purchase fails.

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