Don't Trip Yourself up While Buying your New Home
Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the lender approves their loan. There are still a few major hurdles to jump before your loan closes. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't throw your money around. Although you may be planning ways to turn your new house into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and car purchases until your loan closes. Your lender may send up red flags if you purchase your electronics on your credit cards during your loan process. Because lenders are examining your bank accounts, a large cash purchase is also a mistake.
Don't look for a new career. Your recent job history should show consistency. Getting a new job may not jeopardize your ability to qualify for a mortgage loan - particularly if you are improving your salary. But in some cases, getting a new job during the mortgage loan application process may raise concern and affect your application.
Don't switch your accounts to a new bank or move around your cash. Bank statements from the last few months for accounts in your name (checking, savings, money market, and other assets) will be analyzed as the lender makes decisions regarding your loan application. To detect fraud, lenders will need clear documentation of how you earn your living and where any additional wealth comes from. No matter the reason, changing banks or moving money from one account to another may raise a red flag with your lender and slow down your application process.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Your seller may not realize that any good faith money should go toward your expenses upon closing. You'll need to put the funds into a trust account, or get an attorney to hold them until the deal closes. Should your sale fall through, the contract with the seller should dictate to whom your good faith funds should go.
Tier One Mortgage, LLC can walk you through the pitfalls of getting a mortgage. Call us: (585) 282-0960.