Things to Avoid While Purchasing a 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 loan is approved. Until your loan closes, there are still some hoops to jump through. Below you'll find a list of things to avoid during this critical time of your home purchase.
Don't buy big-ticket items. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but stay away from big purchases like furniture, cars, appliances, or vacations until the loan closes. You may send up red flags with your lender if you purchase new furniture on your credit cards in the middle of your loan process. It's also a mistake to make those huge purchases with cash. Lenders are examining your cash reserve when considering your loan.
Don't look for a new job. Lending Institutions look for a consistent career history on your application forms. Changing jobs may not affect your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. However, if you switch careers before approval, your process could fail or be stalled.
Don't move finances around or switch banks. Your lender will require you to produce recent bank statements of your accounts: savings, checking, money market, and other liquid assets. In order to detect fraud, lenders want to see a clear and consistent picture of how you earn your living and where any additional funds come from. No matter the reason, changing banks or transferring funds may raise a red flag with the lender and slow your application process.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your earnest money belongs to you, not the seller until the sale is final. Your FSBO seller may not realize that the good faith funds should go toward your expenses upon closing. Get a lawyer or other neutral party who will hang on to the deposit or put it in a trust account until you close. If your home purchase fails, your purchase contract should document where the earnest money should go.
Harbor View Lending* a DBA of Megastar Financial can answer questions about these "Don'ts" and many others. Give us a call at (207) 571-8034.