Things to Avoid While Purchasing a Home
What's more fun than buying a bunch of new stuff to adorn your future home? Not much. But making big purchases before closing could be trouble. There are still a few major hurdles to jump before closing. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't buy luxury items. Although you may be dreaming of ways to turn your new house into a castle, avoid major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and car purchases until your loan closes. Your credit numbers could change suddenly if you purchase new furniture using credit cards. Since lenders are perusing your financial accounts, a large cash purchase is also a mistake.
Don't go on a job search. Consistency in your career history is a good thing to banks and other lenders. 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, changing jobs during the mortgage loan application process may bring concern and stymie your approval.
Don't change banks or move finances around in your bank accounts. While the lender considers your mortgage application, you will likely be instructed to produce bank statements for the last two or three months on your checking and savings accounts, money market funds and other liquid finances. In order to avoid fraud, lenders look for a consistent portrayal of how you earn your living and where any additional funds come from. Changing banks or transferring finances to another account - no matter the reason - may make it difficult for your lender to review your funds.
Don't give funds directly to your seller (commonly in cases of "for sale by owner") to be considered earnest money. Your good faith money does not belong to the seller: it is actually yours until the transaction is final. Some FSBO sellers may not realize that any good faith funds should go toward your expenses upon closing. Get an attorney or other neutral person who can hold the funds or place them in a trust account until you close. The disposition of good faith money, if your sale falls through, should be written in the purchase agreement with the seller.
Harbor View Lending* a DBA of Megastar Financial can walk you through the pitfalls of getting a mortgage. Call us: (207) 571-8034.