Mortgage Blog

What's more fun than getting a bunch of new furnishings to adorn your future home? Nothing. But buying big ticket items before your loan closes could be trouble. Until the house is really yours, there are still some hurdles to jump. Here are some actions to stay clear of during the home buying process to be sure the transaction goes smoothly.

Don't empty your wallet on big-ticket items It may be tempting to order that new easy-chair for the soon-to-be-yours parlor, but it's advisable to stay away from making big ticket buys like furniture, appliances, jewelry, or cars until your home loan closes. You may send up red flags with your lender if you buy your electronics on your credit cards during your loan process. It's even a mistake to make those huge purchases with cash. Lenders are examining your available cash when considering your loan.

Don't get a new career. Consistency in your job history is a positive thing to lending institutions. Changing jobs may not compromise your ability to qualify for a mortgage loan - especially if you are getting a better salary. But for some, changing jobs during the loan approval process may raise concern and stymie your approval.

Don't change banks or move money around in your bank accounts. Your lending institution will instruct the submission of recent bank statements of your accounts: savings, checking, money market, and other assets. To eliminate potential fraud, most lending institutions require detailed paperwork to determine the source of all incoming funds. Even for practical reasons, transferring funds or switching banks may make it more difficult for your lending institution to verify your bank history.

Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Your earnest money does not belong to the seller: it remains yours until the sale closes. Any earnest funds are to be used for your expenses upon closing; some sellers might not know this. Find a lawyer or other neutral party who is able to hold the funds or put them in a trust account until closing. If your sale falls through, the contract with the seller should indicate to whom the good faith funds should go.