Don't Trip Yourself up While Buying a 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. Until your loan closes, there are still some hurdles to jump. We have listed some things below we suggest you stay away from when waiting for closing.
Don't overspend on big-ticket items You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but stay away from big purchases like furniture, cars, appliances, or vacations until closing. Using credit cards to buy new living room furniture could compromise your lending process by distorting your numbers. Since lenders are perusing your financial accounts, a large cash purchase is also not advised.
Don't look for a new career. Your recent work history should show consistency. Finding a new job (particularly one with a bigger salary) may not change your ability to qualify for your mortgage loan. However, if you switch careers before you qualify, your mortgage process could fail or be stalled.
Don't switch banks or move finances around in your bank accounts. As your lending institution reviews your mortgage package, you will likely be instructed to provide bank statements for the last few months on your checking accounts, savings accounts, money market accounts and other liquid wealth. To eliminate fraud, lenders want to see clear documentation of how you earn your money and where any additional wealth comes from. Even for practical purposes, moving around money or switching banks might make it more difficult for your lender to confirm your account history.
Don't give money directly to your seller (usually in cases of "for sale by owner") to be considered a "good faith" deposit. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. Any earnest funds are to go toward your expenses upon closing; some FSBO sellers might not know this. An attorney or other type of neutral party can hold onto your funds, or you may put them temporarily into a trust account until you close. Your contract should dictate where the deposit goes if the transaction falls through.
Tier One Mortgage, LLC can walk you through the pitfalls of getting a mortgage. Call us: (585) 282-0960.