What to Avoid During your Home Purchase

With the thrill 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. There are still a few major hurdles to jump before the keys are handed over. Here are some things to refrain from before closing to assure the transaction goes well.

Don't make expensive purchases. You may be itching to buy that new Turkish rug for the soon-to-be-yours living room, but it's best to avoid making big ticket purchases like furniture, appliances, jewelry, or vacations until closing. Using credit cards to buy furniture could compromise your loan process by distorting your numbers. It's also a bad idea to make those large purchases with cash. Lending Institutions are looking at your cash on hand when considering your loan.

Don't look for a new job. Stability in your work history is a good thing to lenders. Getting a new job before you apply for a loan may not get in the way of your approval at all. However, switching careers in the middle of your approval process could influence your approval.

Don't move money around or switch banks. Most lenders will ask for recent bank statements for accounts in your name: checking, savings, money market, and other assets. In order to eliminate fraud, lenders need clear documentation of how you earn your living and where any additional wealth comes from. No matter the purpose, changing banks or moving money from one account to another might raise a red flag with your lender and slow down your approval process.

Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Until closing, any good faith deposit remains yours. Your good faith money is to be applied to your expenses closing; some sellers may not know this. A neutral party, like an attorney can hold your earnest funds, or you may place them temporarily into a trust account until closing. The final disposition of earnest money, if your transaction fails, should be specified in the contract with your seller.

Tier One Mortgage, LLC can walk you through the pitfalls of getting a mortgage. Call us: 5852820960.