Don't Trip Yourself up While Buying your Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. Until your loan closes, there still remain some hoops to jump through. Below you'll find a list of actions to avoid during this critical time of your home purchase.
Don't buy big-ticket items. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but stay away from big purchases like furniture, jewelry, appliances, or vacations until the loan closes. Using credit cards to buy new living room furniture could compromise your lending process by distorting your numbers. It's also a bad idea to make those huge purchases with cash. Lenders are looking at your available cash when considering your loan.
Don't go on a job search. Lenders like to see a consistent career history on your paperwork. Finding a new job (particularly one with a bigger paycheck) may not affect your ability to qualify for a loan. However, finding a new job during your application process may influence your approval.
Don't move finances around or switch banks. As the lender reviews your mortgage application, you will probably be asked to provide bank statements for recent months for your checking accounts, savings accounts, money market funds and other liquid wealth. The lending institution hopes to see a consistent rise and fall of your funds each pay period, in the interest of avoiding fraud. Even for innocent reasons, moving around cash or switching banks may make it more difficult for the lending institution to verify your account history.
Don't give money directly to your seller (usually in the case of of "for sale by owner") to be considered earnest money. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. Any earnest funds are to be used for your expenses upon closing; a individual seller might not realize this. We recommend that you put the money into a trust account, or get an attorney to hold it until the closing of the sale. Your purchase contract should dictate to whom the money goes if the home purchase fails.
Tier One Mortgage, LLC can walk you through the pitfalls of getting a mortgage. Give us a call: (585) 282-0960.