Don't Trip Yourself up While Buying your New Home

Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the loan is approved. It's best to remember that until you get the keys, your lender is watching you very closely. Below you'll find a list of actions to avoid during this critical time of your home purchase.

Don't buy luxury items. Although you may be planning ways to turn your new home into a castle, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and car purchases until the closing of your loan. You may send up red flags with your lender if you buy your appliances on your credit cards during your loan process. Using cash to buy big items can also create a problem: most lending institutions consider your cash reserve when approving your loan.

Don't get a new career. Your recent career history should show stability. Finding a new job (especially one with a better paycheck) may not affect your ability to qualify for a mortgage loan. But for some people, getting a new job during the loan approval process might raise concern and hinder your approval.

Don't switch your accounts to a new bank or move around your finances. Your lender will ask for recent bank statements on all of your accounts: checking, savings, money market, and other assets. In order to detect fraud, lenders will need a clear and consistent picture of how you earn your living and where additional funds come from. Changing banks or moving funds elsewhere - for whatever reason - might hinder the documentation of your funds.

Don't give funds directly to your seller (usually in the case of of "for sale by owner") for a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's up until the deal closes. Your good faith funds are to go toward your expenses closing; a individual seller might not know this. Get an attorney or other neutral party who can hang on to the money or place it in a trust account until closing. The disposition of good faith money, in the case of a failed transaction, should be included in the purchase agreement with your seller.

Tier One Mortgage, LLC can walk you through the pitfalls of getting a mortgage. Call us at 5852820960.