What to Avoid During your Home Purchase

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. It's wise to remember that until your keys are in hand, your lender is watching you very closely. We have listed some things below we suggest you stay away from when waiting for closing.

Don't buy big-ticket items. Although you may be planning ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and vehicle purchases until your loan closes. Financing new furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. It's also a red flag to make those large purchases with cash. Lending Institutions are looking at your cash reserve when considering your loan.

Don't go on a job search. Your recent work history should show consistency. Getting a new career before you apply for a loan may not affect your approval at all. But for some, switching jobs during the loan application process may raise concern and stymie your application.

Don't switch banks or move finances around in your bank accounts. Most lenders will require you to produce recent bank statements of accounts in your name: savings, checking, money market, and other assets. In order to avoid fraud, lenders look for clear documentation of how you earn your living and where additional wealth comes from. Switching banks or moving money elsewhere - for whatever reason - might hinder the documentation of your funds.

Don't give money directly to your seller (generally in the case of of "for sale by owner") to be considered earnest money. Until the completion of the deal, the earnest money actually belongs to you. Your seller may not realize that the good faith funds should go toward your expenses at closing. Find an attorney or other neutral party who can hang on to the funds or place them in a trust account until you close. If your transaction fails, the purchase contract should document where this good faith funds should go.

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

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