Things to Avoid While Buying a Home

What's more fun than getting a bunch of new stuff to adorn your future home? Nothing. But making big ticket purchases 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 during the home buying process to be sure the transaction goes well.

Don't overspend on big-ticket items It may be tempting to order that new couch for the soon-to-be-yours parlor, but it's advisable to avoid making large purchases like furniture, appliances, electronic equipment, or cars until your home loan closes. Using plastic to buy new living room furniture could compromise your loan process by distorting your numbers. Using cash to buy big items can even create an issue: most lenders take into consideration your available cash when approving your mortgage.

Don't go on a job search. Lending Institutions look for a consistent job history on your application. Changing jobs may not compromise your ability to qualify for a loan - especially if you are getting a bigger paycheck. However, finding a new career during your application process might affect your approval.

Don't take your accounts to a new bank or move around your cash. While your lending institution considers your loan application, you will probably be required to produce bank statements for the last few months for your saving and checking 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 additional wealth comes from. Even for practical reasons, transferring money or switching banks could make it more difficult for the lending institution to confirm your bank history.

Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's up until the deal closes. Although some FSBO sellers might not understand this, any good faith money should go toward the buyer's closing expenses. Get an attorney or other neutral party who can hold the funds or put them in a trust account until closing. The disposition of earnest funds, if your transaction fails, should be included in the purchase agreement with the seller.

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