Don't Trip Yourself up While Buying your New Home

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Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the lender approves the loan. Until the keys are handed over, there still remain some hurdles to jump. Here are some actions to avoid before closing to assure your transaction goes well.

Don't make expensive purchases. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but keep away from big purchases like furniture, cars, appliances, or vacations until your loan closes. Financing your bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Using cash to buy expensive items can even create a problem: most lending institutions look at your cash reserve when approving your application.

Don't get a new career. Your recent job history should show consistency. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. However, switching careers in the middle of the approval process could affect your approval.

Don't switch banks or move finances around in your accounts. Bank statements from recent months for accounts in your name (checking, savings, money market, and others) will probably be analyzed as the lending institution considers your loan application. To eliminate fraud, lenders want to see clear documentation of how you earn your money and where any additional funds come from. Even for innocent reasons, moving around money or switching banks might make it difficult for your lending institution to confirm your bank history.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Your good faith deposit does not belong to the seller: it is actually yours until the transaction is final. Any good faith money is to be used for your expenses upon closing; some sellers might not realize this. An attorney or other type of neutral party can hold onto your deposit, or you may put it temporarily into a trust account until you close. Your purchase agreement should dictate to whom the funds go if the transaction fails.

Tier One Mortgage, LLC can walk you through the pitfalls of getting a mortgage. Call us: (585) 872-1486.