Don't Trip Yourself up While Buying a New Home

What's more fun than getting a bunch of new furniture to adorn your future home? Nothing. But buying big ticket items before your loan closes can be harmful. There are still a few major hurdles to jump before closing. Below you'll find a list of things to stay away from during this critical time of your home purchase.

Don't buy luxury items. Although you may be listing ways to turn your new house into a castle, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and car purchases until your loan closes. Financing new bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Using cash to purchase expensive items can also be an issue: most lending institutions take into consideration your cash on hand when approving your mortgage loan.

Don't look for a new job. Your recent work history should show consistency. Getting a new job before you start the application process for a loan may not compromise your approval at all. However, if you switch careers before your loan is approved, your mortgage process could fail or be slowed down.

Don't take your accounts to a new bank or move around your money. Your lending institution will require you to provide recent bank statements of your accounts: savings, checking, money market, and other liquid assets. The lender will need to see a consistent rise and fall of your money each month, in the interest of avoiding fraud. No matter the reason, switching banks or transferring money could raise a red flag with your lender and impede your qualification process.

Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, any good faith money remains yours. Some FSBO sellers might not realize that any good faith funds is to go toward your expenses upon closing. An attorney or other type of neutral party can hang onto your earnest funds, or you may place them temporarily into a trust account until you close. Should your home purchase fail, your contract with the seller should dictate to whom your good faith deposit should go.

At F&T Mortgage, Inc. NMLS # 168839 (, we answer questions about this process every day. Call us at 214-300-8756.

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