What to Avoid During your Home Purchase

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. There are still a few major hurdles to jump before the keys are handed over. Below you'll find a list of actions to stay away from during this critical time of your home purchase.

Don't make expensive purchases. It may be tempting to order that new sofa for the soon-to-be-yours parlor, but it's best to avoid making big ticket buys like furniture, appliances, jewelry, or cars until closing. You may send up red flags with your lender if you finance new furniture on your credit cards in the middle of your loan process. Because lenders are reviewing your financial accounts, a large cash purchase is also a bad idea.

Don't get a new career. Your recent career history should show stability. Getting a new job may not affect your ability to qualify for a loan - particularly if you are getting a bigger paycheck. However, if you switch careers before your loan is approved, your process could fail or be stalled.

Don't switch your accounts to a new bank or move around your finances. Bank statements from the last few months for accounts in your name (checking, savings, money market, and other assets) will likely be reviewed as the lending institution considers your approval. To eliminate potential fraud, most loans want a detailed paper trail to determine the source of all cash. Switching banks or transferring money elsewhere - even if its merely to consolidate funds - might hinder the documentation of your funds.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it remains yours until closing. Your seller might not realize that this good faith money must go toward your expenses at closing. You'll need to put the deposit into a trust account, or get an attorney to hold it until the deal closes. The purchase contract should specify where the deposit goes if the home purchase fails.

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

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