Don't Trip Yourself up While Buying your Home
What's more fun than getting a bunch of new furnishings to adorn your future home? Nothing. But buying big ticket items before your loan closes could be trouble. Until your keys are in hand, there still remain some hurdles to jump. Here are some actions to refrain from before closing to assure your transaction goes well.
Don't buy big-ticket items. Although you will be listing ways to turn your new home into a castle, avoid major purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and vehicle purchases until the closing of your loan. Financing new stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Because lending institutions are perusing your financial accounts, a large cash purchase is also not advised.
Don't get a new career. Your recent career history should show consistency. Getting a new job may not affect your ability to qualify for a mortgage loan - especially if you are improving your salary. But for some people, changing jobs during the mortgage application process could raise concern and hinder your application.
Don't move finances around or change banks. Bank statements from the last few months for accounts in your name (checking, savings, money market, and other accounts) will probably be reviewed as the lending institution considers your application. In order to eliminate fraud, lenders require a consistent portrayal of how you earn your living and where additional money comes from. Even for innocent reasons, transferring money or changing banks might make it more difficult for the lender to document your account history.
Don't give cash directly to your seller (generally in the case of of "for sale by owner") for earnest money. Your earnest money does not belong to the seller: it remains yours until the transaction is final. The earnest money is to go toward your expenses closing; the individual seller may not know this. You'll need to put the funds into a trust account, or get a neutral party, like a lawyer to hold them until the deal closes. The disposition of good faith money, in the case of a failed transaction, should be indicated in the purchase agreement with the seller.
Tier One Mortgage, LLC can walk you through the pitfalls of getting a mortgage. Give us a call: (585) 282-0960.