Things to Avoid While Purchasing a 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. It's best to remember that until you get the keys, your lender is watching your accounts very closely. Below you'll find a list of things to stay away from during this critical time of your home purchase.

Don't overspend on big-ticket items You may be itching to buy that new couch for the soon-to-be-yours parlor, but it's advisable to avoid making big ticket purchases like furniture, appliances, jewelry, or cars until closing. You may send up red flags with your lender if you buy new furniture on your credit cards during your loan process. Using cash to buy big-ticket items can also be a problem: most lending institutions take into consideration your available cash when approving your mortgage loan.

Don't get a new job. Consistency in your work history is a positive thing to lenders. Getting a new job may not jeopardize your ability to qualify for a loan - particularly if you are getting a better salary. However, finding a new job in the middle of your application process might affect whether or not you are approved.

Don't take your accounts to a new bank or move around your finances. Your lender will require you to provide recent bank statements on your accounts: checking, savings, money market, and other assets. Your lender will need to see a steady rise and fall of your funds over the month, in order to avoid fraud. Switching banks or moving funds to another account - even if its merely to pool funds - could hinder the documentation of your funds.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. As a rule, your good faith money belongs to you, not to the seller up until the deal closes. Any good faith funds are to be used for your expenses upon closing; a individual seller might not understand this. We recommend that you put the funds into a trust account, or get an attorney to hold them until the closing of the sale. The final disposition of good faith money, in the case of a failed transaction, should be included in the contract with the seller.

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