Things to Avoid While Purchasing a New Home

Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the lender approves their loan. Until the house is really yours, there are still some hurdles to jump. We have listed some actions below you will want to avoid when waiting for your loan to close.

Don't buy luxury items. It may be tempting to order that new couch for the soon-to-be-yours parlor, but it's best to avoid making large buys like furniture, appliances, electronic equipment, or cars until your home loan closes. Using plastic to buy furniture could compromise your lending process by altering your numbers dramatically. Using cash to purchase big items can even create an issue: most banks take into consideration your available cash when approving your application.

Don't go on a job search. Stability in your job history is a positive thing to lenders. Getting a new job may not affect your ability to qualify for a loan - especially if you are getting a better salary. However, getting a new job during the approval process may influence whether or not you are approved.

Don't move money around or switch banks. Most lenders will instruct the submission of recent bank statements on your accounts: checking, savings, money market, and other liquid assets. Your lending institution looks for a consistent rise and fall of your funds over the pay period, in the interest of avoiding fraud. Even for practical reasons, transferring cash or changing banks could make it difficult for your lending institution to verify your account history.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money belongs to you, not the seller up until the sale is final. A FSBO seller may not know that any good faith funds must go toward your expenses at closing. An attorney or other type of neutral party can hold your earnest funds, or you may place them temporarily into a trust account until you close. Your purchase contract should document where the money goes if the home purchase falls through.

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