What to Avoid During a Home Purchase
Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the loan is approved. Until your loan closes, there are still some hoops to jump through. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't make expensive purchases. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but stay away from expensive purchases like furniture, jewelry, appliances, or vacations until closing. Financing your bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Because lenders are perusing your bank accounts, a large cash purchase is also a bad idea.
Don't look for a new career. Lending Institutions like to see a consistent career history on your paperwork. Getting a new job may not compromise your ability to qualify for a loan - particularly if you are getting a better salary. But for some people, switching jobs during the mortgage loan approval process could raise concern and stymie your approval.
Don't take your accounts to a new bank or move around your finances. Your lending institution will require you to submit recent bank statements for your accounts: savings, checking, money market, and other liquid assets. To eliminate fraud, lenders need a consistent portrayal of how you earn your money and where any additional funds come from. No matter the reason, changing banks or moving money from one account to another might raise a red flag with the lender and impede your application process.
Don't give money directly to your seller (generally in the case of of "for sale by owner") for a "good faith" deposit. Your earnest money does not belong to the seller: it is actually yours until closing. Any good faith funds are to go toward your expenses upon closing; the FSBO seller may not realize this. A neutral party, like an attorney can hold your deposit, or you may put it temporarily into a trust account until you close. The contract should indicate who gets the earnest funds if the transaction falls through.
Tier One Mortgage, LLC can walk you through the pitfalls of getting a mortgage. Give us a call: (585) 282-0960.