Don't Trip Yourself up While Buying a New Home

Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the lender approves their loan. There are still a few major hurdles to jump before closing. Here are some things to avoid during the home buying process to assure the transaction goes well.

Don't throw your money around. It may be tempting to order that new couch for the soon-to-be-yours parlor, but it's best to avoid making large purchases like furniture, appliances, jewelry, or vacations until your home loan closes. Using plastic to buy new living room furniture could jeopardize your lending process by changing your numbers dramatically. It's even a red flag to make those huge purchases with cash. Lenders are looking at your cash on hand when considering your loan.

Don't look for a new career. Your recent career history should show stability. Getting a new career before you apply for a mortgage loan may not jeopardize your approval at all. However, if you switch careers before you qualify, your process could fail or be stalled.

Don't change banks or move money around in your bank accounts. Your lender will require you to submit recent bank statements on accounts in your name: checking, savings, money market, and other assets. Your lending institution hopes to see a consistent flow of your funds over the pay period, in order to rule out fraud. Even for innocent reasons, moving around finances or changing banks may make it more difficult for the lending institution to document your account history.

Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, any earnest money actually belongs to you. Although some individual sellers may not understand this, your good faith funds should be used for your closing expenses. It's wise to put the money into a trust account, or get an attorney to hold it until the closing of the sale. The final disposition of earnest funds, in the case of a failed transaction, should be specified in the purchase agreement with the seller.

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