Don't Trip Yourself up While Buying a Home

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What's better than buying a bunch of new furnishings to go in your future home? Nothing. But buying big ticket items before closing could be trouble. Keep in mind that until closing, your lender is watching you very closely. Below you'll find a list of things to avoid during this crucial time of your home purchase.

Don't buy big-ticket items. It may be tempting to order that new Turkish rug for the soon-to-be-yours living room, but it's advisable to avoid making major purchases like furniture, appliances, electronic equipment, or cars until your home loan closes. Using credit cards to buy furniture could compromise your loan process by altering your numbers dramatically. It's also a red flag to make those large purchases with cash. Lending Institutions are looking at your available cash when considering your loan.

Don't go on a job search. Your recent work history should show consistency. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. However, finding a new job during the loan process may influence your approval.

Don't take your accounts to a new bank or move around your cash. Your lender will require you to provide recent bank statements for all of your accounts: savings, checking, money market, and other liquid assets. Your lending institution is looking for a consistent rise and fall of your money over the pay period, in order to avoid fraud. Changing banks or transferring money to another account - no matter the purpose - could make it harder for the lender to verify your funds.

Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, the good faith deposit remains yours. Although your seller may not understand this, your good faith money should be used for the buyer's closing expenses. Find an attorney or other neutral person who will hold the money or place it in a trust account until closing. If your sale falls through, your purchase agreement should indicate to whom the earnest money should go.

At Sharp Mortgages, Inc., we answer questions about this process every day. Give us a call: 904-997-1093.