Things to Avoid While Buying a Home

What's more fun than buying a bunch of new furniture to adorn your future home? Nothing. But buying big ticket items before your loan closes can be a misstep. There are still a few major hurdles to jump before your loan closes. Here are some things to avoid during the home buying process to assure your transaction goes smoothly.

Don't overspend on big-ticket items Although you may be planning ways to turn your new house into a castle, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and vehicle purchases until your loan closes. Using plastic to buy furniture could compromise your loan process by distorting your numbers. It's even a red flag to make those large purchases with cash. Lenders are examining your available cash when considering your loan.

Don't look for a new job. Your recent job history should show stability. Finding a new career (particularly one with a bump in salary) may not affect your ability to qualify for a loan. However, switching jobs in the middle of the loan process may affect whether or not you are approved.

Don't move money around or switch banks. Bank statements from recent months for accounts in your name (checking, savings, money market, and others) will be reviewed as the lender considers your loan application. Your lending institution is looking for a consistent flow of your funds each pay period, in the interest of ruling out fraud. Switching banks or moving funds to another account - no matter the purpose - may make it difficult for your lender to verify your funds.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, any earnest money actually belongs to you. Although your FSBO seller might not understand this, any good faith funds must be applied to the buyer's closing expenses. An attorney or other type of neutral party can hold onto your earnest funds, or you may put them temporarily into a trust account until closing. The disposition of earnest funds, in the case of a failed transaction, should be written in the contract with the seller.

F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org) can walk you through the pitfalls of getting a mortgage. Give us a call at 214-300-8756.



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