Don't Trip Yourself up While Buying your Home
What's more fun than getting a bunch of new furnishings to go in your future home? Nothing. But buying big ticket items before your loan closes can be a mistake. It's best to remember that until your keys are in hand, your lender is watching your accounts very closely. We have given you a list of things below you will want to stay away from when waiting for your loan to close.
Don't empty your wallet on big-ticket items Although you may be dreaming of ways to turn your new home into a showplace, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and car purchases until the closing of your loan. Financing new Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. It's even a bad idea to make those big-ticket purchases with cash. Lenders are examining your available cash when considering your loan.
Don't get a new career. Lenders like to see a consistent job history on your application. Getting a new career before you start the application process for a mortgage may not affect your approval at all. But for some people, changing careers during the mortgage loan approval process could bring concern and hinder your approval.
Don't move cash around or switch banks. Your lending institution will require you to provide recent bank statements on accounts in your name: checking, savings, money market, and other assets. To avoid potential fraud, most loans need detailed paperwork to document the source of all funds. No matter the reason, moving banks or transferring funds may raise a red flag with the lender and impede your application process.
Don't give money directly to your seller (generally in cases of "for sale by owner") to be used as earnest money. Until closing, the good faith money actually belongs to you. Although some individual sellers might not understand this, any good faith funds should go toward your closing expenses. Get a lawyer or other neutral person who will hang on to the funds or place them in a trust account until closing. If your transaction fails, the contract with the seller should specify to whom your earnest money should go.
Tier One Mortgage, LLC can walk you through the pitfalls of getting a mortgage. Call us: (585) 282-0960.