Don't Trip Yourself up While Buying your Home

Some 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 loan is approved. It's wise to remember that until closing, your lender is watching your finances very closely. We have given you a list of actions below we suggest you stay away from when waiting for your loan to close.

Don't overspend on big-ticket items Although you will be planning ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. You may send up red flags with your lender if you finance new electronics on your credit cards in the middle of your loan process. Because lending institutions are perusing your bank accounts, a large cash purchase is also a mistake.

Don't look for a new job. Lenders like to see a consistent career history on your paperwork. Finding a new career (especially one with a better paycheck) may not jeopardize your ability to qualify for a mortgage. However, getting a new job during your approval process could affect your approval.

Don't switch banks or move finances around in your accounts. Your lender will ask for recent bank statements for accounts in your name: checking, savings, money market, and other assets. To avoid potential fraud, most lenders need a thorough paper trail to verify the source of all cash. No matter the purpose, switching banks or transferring funds might raise a red flag with the lender and slow down your application process.

Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until closing, any good faith deposit remains yours. Although your FSBO seller may not realize this, your good faith funds must be used for your closing expenses. Get an attorney or other neutral person who will hold the funds or place them in a trust account until closing. Should your sale fall through, your contract with the seller should dictate to whom this earnest money should go.

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