Don't Trip Yourself up While Buying your Home

With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. Keep in mind that until your keys are in hand, your lender is watching your accounts very closely. We have listed some things below you will want to avoid when waiting for closing.

Don't make expensive purchases. Although you will be planning ways to turn your new house into a castle, avoid major purchases like appliances, electronics, or furniture. We also recommend that you keep away from vacations and vehicle purchases until your loan closes. Using plastic to buy new living room furniture could jeopardize your lending process by changing your numbers dramatically. Using cash to buy expensive items can even be a mistake: most banks consider your available cash when approving your mortgage.

Don't go on a career search. Lending Institutions feel comfortable seeing a consistent work history on your application. Getting a new job before you apply for a loan may not affect your approval at all. However, finding a new career during the loan process may affect whether or not you are approved.

Don't switch banks or move finances around in your bank accounts. As the lender reviews your mortgage application, you will likely be asked to produce bank statements for the last few months for your checking accounts, savings accounts, money market funds and other liquid wealth. To eliminate potential fraud, most lenders require detailed paperwork to verify the source of all incoming funds. Even for practical purposes, moving around funds or switching banks might make it more difficult for your lender to document your account history.

Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. As a rule, your earnest money belongs to you, not the seller until closing. Your good faith funds are to go toward your expenses closing; some individual sellers might not realize this. We recommend that you put the deposit into a trust account, or get a neutral party, like a lawyer, to hold it until the closing of the sale. Your contract should specify who keeps the deposit if the transaction falls through.

Tier One Mortgage, LLC can answer questions about these "Don'ts" and many others. Call us: 5852820960.