What to Avoid During your Home Purchase

What's better than buying a bunch of new furniture to go in your future home? Nothing. But buying big ticket items before your loan closes could be trouble. Until closing, there still remain some hoops to jump through. We have listed some things below you will want to stay away from when waiting for your loan to close.

Don't empty your wallet 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, jewelry, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. It's also a mistake to make those huge purchases with cash. Lenders are looking at your cash reserve when considering your loan.

Don't look for a new career. Consistency in your career history is a good thing to banks and other lenders. Getting a new career before you apply for a loan may not get in the way of your approval at all. However, if you switch careers before your loan is approved, your process could fail or be slowed down.

Don't take your accounts to a new bank or move around your cash. Bank statements from recent months for all of your accounts (savings, checking, money market, and others) will be reviewed as the lending institution makes decisions regarding your loan application. To detect fraud, lenders will need clear documentation of how you earn your living and where additional money comes from. Even for innocent purposes, moving around funds or switching banks could make it 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") for a "good faith" deposit. Your good faith deposit does not belong to the seller: it is actually yours until the transaction is final. Your earnest money is to be used for your expenses closing; some sellers may not understand this. You'll want to put the funds into a trust account, or get an attorney to hold them until the closing of the sale. Should your sale fall through, your contract with the seller should specify where your good faith deposit should go.

Tier One Mortgage, LLC can walk you through the pitfalls of getting a mortgage. Give us a call at 5852820960.