Things to Avoid While Buying a Home
What's more fun than buying a bunch of new stuff to adorn your future home? Not much. But buying big ticket items before closing can be a mistake. There still remain a few major hurdles to jump before closing. Below you'll find a list of things to avoid during this critical time of your home purchase.
Don't make expensive purchases. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but stay away from expensive purchases like furniture, jewelry, appliances, or vacations until closing. Using plastic to buy furniture could compromise your loan process by altering your numbers dramatically. Using cash to purchase big items can even create an issue: most lenders look at your cash on hand when approving your mortgage loan.
Don't look for a new job. Lending Institutions feel comfortable seeing a consistent job history on your application forms. Finding a new job (particularly one with a bigger paycheck) may not hinder your ability to qualify for your mortgage. However, if you switch careers before approval, your process could fail or be stalled.
Don't move cash around or change banks. While your lender reviews your mortgage loan package, you will probably be instructed to submit bank statements for the last few months for your saving and checking accounts, money market funds and other liquid finances. The lender needs to see a consistent rise and fall of your funds each pay period, in the interest of avoiding fraud. No matter the purpose, changing banks or moving money from one account to another could raise a red flag with your lender and slow down your approval process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. As a rule, your earnest money is yours, not the seller's until the deal closes. Although your FSBO seller might not realize this, your earnest money should be applied to the buyer's closing expenses. An attorney or other type of neutral party can hold onto your funds, or you may place them temporarily into a trust account until closing. The contract should indicate to whom the funds go if the transaction does not go through.
Tier One Mortgage, LLC can answer questions about these "Don'ts" and many others. Give us a call: (585) 282-0960.