What to Avoid During a Home Purchase
What's more fun than getting a bunch of new furniture to go in your future home? Nothing. But buying big ticket items before closing could be trouble. Keep in mind that until your keys are in hand, 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 buy that new easy-chair for the soon-to-be-yours parlor, but it's advisable to stay away from making large buys like furniture, appliances, jewelry, or vacations until closing. Your credit numbers could change suddenly if you purchase new furniture using plastic. Because lending institutions are perusing your bank accounts, a large cash purchase is also not advised.
Don't get a new job. Consistency in your work history is a good thing to banks and other lenders. Finding a new career (especially one with a bigger salary) may not hinder your ability to qualify for a loan. However, switching jobs during your approval process may influence your approval.
Don't move cash around or change banks. Your lending institution will ask for recent bank statements of all of your accounts: savings, checking, money market, and other assets. Your lending institution looks for a consistent rise and fall of your funds each month, in order to avoid fraud. Even for innocent purposes, transferring funds or switching banks could make it difficult for your lending institution to confirm your account history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. Your good faith money is to go toward your expenses closing; your FSBO seller might not realize this. Get a lawyer or other neutral party who is able to hold the deposit or place it in a trust account until you close. The final disposition of earnest money, if your transaction fails, should be written in the contract with your seller.
Tier One Mortgage, LLC can walk you through the pitfalls of getting a mortgage. Call us at (585) 282-0960.