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What’s more fun than buying a bunch of new furniture to go in your new home? Not much. However, buying big-ticket items before your loan closes can be a mistake. It’s best to remember that until you get the keys, your lender is watching your finances very closely. Below you’ll find a list of things to avoid during this crucial time of your home purchase.

Don’t overspend on big-ticket items You may be tempted to order that new easy-chair for the soon-to-be-yours family room, but it’s advisable to stay away from making major purchases like furniture, appliances, jewelry, or cars until your home loan closes. You may send up red flags with your lender if you buy your furniture on your credit cards during your loan process. It’s also a bad idea to make those huge purchases with cash. Lenders are examining your cash reserve when considering your loan.

Don’t look for a new job Lenders like to see a consistent career history on your application forms. Getting a new career before you start the application process for a mortgage may not get in the way of your approval at all. However, if you switch careers before your loan is approved, your loan process could fail or be slowed down.

Don’t switch banks or move finances around in your accounts. As the lender reviews your mortgage application, you will likely be asked to provide bank statements for the last two or three months for your saving and checking accounts, money market funds and other liquid finances. Your lending institution will need to see a consistent flow of your money each month, in the interest of ruling out fraud. Even for innocent purposes, moving around money or switching banks may make it difficult for the lending institution to verify your bank history.

Don’t give your FSBO (for sale by owner) seller a “good faith” deposit, delivered to his door. Your good faith deposit does not belong to the seller: it is actually yours until closing. Your earnest funds are to go toward your expenses closing; some sellers might not know this. Get a lawyer or other neutral party who is able to hang on to the money or place it in a trust account until closing. The disposition of earnest money, if your home purchase falls through, should be documented in the purchase agreement with your seller.

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