Don't Trip Yourself up While Buying a New Home
What's better than getting a bunch of new furniture to go in your future home? Not much. But buying big ticket items before your loan closes can be an error. It's best to remember that until you get the keys, your lender is watching your finances very closely. We have listed some things below we suggest you stay away from when waiting for your loan to close.
Don't make expensive purchases. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but stay away from expensive purchases like furniture, jewelry, appliances, or vacations until your loan closes. Your credit numbers could change suddenly if you purchase new furniture using plastic. Using cash to buy big-ticket items can also create a mistake: most banks look at your available cash when approving your loan.
Don't look for a new job. Consistency in your career history is a good thing to lenders. Finding a new career (particularly one with a bigger paycheck) may not hinder your ability to qualify for a loan. However, if you switch careers before you qualify, your mortgage process could fail or be bogged down.
Don't switch banks or move cash around in your bank accounts. Most lenders will ask for recent bank statements on accounts in your name: checking, savings, money market, and other assets. To eliminate fraud, lenders will need a clear and consistent picture of how you earn your money and where additional money comes from. Changing banks or moving finances elsewhere - no matter the reason - may make it difficult for the lender to review your funds.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Until the sale is complete, the good faith deposit actually belongs to you. The FSBO seller might not realize that any good faith money must be applied to your expenses at closing. An attorney or other type of neutral party can hang onto your funds, or you may put them temporarily into a trust account until you close. The final disposition of good faith money, if your sale falls through, should be written in the purchase agreement with your seller.
Tier One Mortgage, LLC can answer questions about these "Don'ts" and many others. Give us a call at (585) 282-0960.