Don't Trip Yourself up While Buying your New Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the loan is approved. There still remain a few major hurdles to jump before the house is realy yours. Here are some things to stay clear of during the home buying process to be sure the transaction goes smoothly.
Don't make expensive purchases. Although you may be dreaming of ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and car purchases until your loan closes. Your lender may send up red flags if you purchase new electronics on your credit cards in the middle of your loan process. Because lenders are looking closely at your bank accounts, a large cash purchase is also a mistake.
Don't go on a job search. Consistency in your career history is a good thing to lenders. Getting a new career before you start the application process for a mortgage loan may not get in the way of your approval at all. However, switching careers during your loan process could affect whether or not you are approved.
Don't move money around or switch banks. As the lending institution reviews your mortgage application, you will probably be required to submit bank statements for recent months for your saving and checking accounts, money market accounts and other liquid wealth. To eliminate potential fraud, most loans need thorough paperwork to determine the source of all funds. No matter the purpose, moving banks or transferring money could raise a red flag with your lender and slow your application process.
Don't give cash directly to your seller (usually in the case of of "for sale by owner") for earnest money. Your good faith money does not belong to the seller: it is actually yours until the transaction is final. Although some FSBO sellers may not realize this, your earnest money must go toward your closing expenses. Get a lawyer or other neutral person who will hang on to the deposit or place it in a trust account until closing. The contract should dictate to whom the deposit goes if the transaction does not go through.
Tier One Mortgage, LLC can answer questions about these "Don'ts" and many others. Call us at (585) 282-0960.