Don't Trip Yourself up While Buying your 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 loan is approved. It's best to remember that until closing, your lender is watching you very closely. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't overspend on big-ticket items You may be itching to buy that new easy-chair for the soon-to-be-yours den, but it's advisable to stay away from making large buys like furniture, appliances, jewelry, or vacations until your home loan closes. Using plastic to buy new living room furniture could compromise your loan process by changing your numbers dramatically. It's even a mistake to make those big-ticket purchases with cash. Lenders are looking at your cash reserve when considering your loan.
Don't look for a new job. Lending Institutions look for a consistent work history on your application forms. Getting a new career before you apply for a mortgage may not compromise your approval at all. However, switching careers in the middle of the approval process may affect your approval.
Don't move finances around or switch banks. While the lender considers your loan package, you will probably be required to submit bank statements for the last few months on your saving and checking accounts, money market funds and other liquid wealth. To avoid fraud, lenders require a consistent portrayal of how you earn your money and where additional money comes from. Changing banks or moving money to another account - for whatever reason - might hinder the documentation of your accounts.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, the good faith deposit remains yours. Some FSBO sellers may not realize that your good faith funds should go toward your expenses upon closing. Find an attorney or other neutral person who is able to hold the money or put it in a trust account until closing. Your contract should document where the funds go if the transaction does not go through.
At Tier One Mortgage, LLC, we answer questions about this process every day. Call us: (585) 282-0960.