Things to Avoid While Buying a Home

Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the lender approves the loan. There still remain a few major hurdles to jump before closing. Below you'll find a list of things to avoid during this crucial time of your home purchase.

Don't overspend on big-ticket items Although you will be listing ways to turn your new house into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Your credit numbers could change suddenly if you purchase new furniture using credit cards. It's even a red flag to make those big-ticket purchases with cash. Lenders are looking at your cash on hand when considering your loan.

Don't look for a new job. Stability in your career history is a good thing to lenders. Getting a new job may not compromise your ability to qualify for a mortgage loan - particularly if you are going to be making more money. However, switching careers in the middle of your approval process may influence whether or not you are approved.

Don't take your accounts to a new bank or move around your finances. Most lenders will ask for recent bank statements of all of your accounts: checking, savings, money market, and other assets. Your lending institution looks for a steady flow of your money each pay period, in order to avoid fraud. Changing banks or moving money elsewhere - for whatever purpose - might make it harder for your lender to document your funds.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Your good faith deposit does not belong to the seller: it is actually yours until closing. Some FSBO sellers may not realize that your earnest money is to go toward your expenses at closing. We recommend that you put the deposit into a trust account, or get an attorney to hold it until the deal closes. Should your home purchase fail, the contract with the seller should dictate to whom the earnest money should go.

Harbor View Lending* a DBA of Megastar Financial can answer questions about these "Don'ts" and many others. Call us at (207) 571-8034.