What to Avoid During your Home Purchase

What's better than buying a bunch of new furniture to go in your future home? Not much. But buying big ticket items before closing could be trouble. There still remain a few major hurdles to jump before the house is realy yours. Below you'll find a list of actions to avoid during this critical time of your home purchase.

Don't throw your money around. Although you may be planning ways to turn your new home into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Your lender may send up red flags if you buy your appliances on your credit cards in the middle of your loan process. Using cash to buy big items can also be an issue: many lenders look at your available cash when approving your application.

Don't get a new career. Lending Institutions feel comfortable seeing a consistent job history on your paperwork. Changing jobs may not jeopardize your ability to qualify for a loan - especially if you are getting a better salary. However, switching careers in the middle of the application process may influence whether or not you are approved.

Don't switch banks or move cash around in your accounts. Bank statements from the last two or three months for accounts in your name (savings, checking, money market, and others) will be reviewed as the lending institution considers your mortgage application. To detect potential fraud, most lenders require a detailed paper trail to determine the source of all incoming funds. Even for innocent purposes, transferring funds or changing banks could make it difficult for your lender to confirm your account history.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Your good faith money does not belong to the seller: it remains yours until closing. Your earnest money is to go toward your expenses closing; some sellers might not know this. We recommend that you put the money into a trust account, or get an attorney to hold it until the closing of the sale. The disposition of earnest money, if your home purchase falls through, should be written in the contract with your seller.

Tier One Mortgage, LLC can walk you through the pitfalls of getting a mortgage. Give us a call at (585) 282-0960.