Things to Avoid While Purchasing a Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. There still remain a few major hurdles to jump before your loan closes. We have given you a list of actions below we suggest you stay away from when waiting for your loan to close.

Don't buy big-ticket items. It may be tempting to buy that new Turkish rug for the soon-to-be-yours parlor, but it's advisable to stay away from making major buys like furniture, appliances, jewelry, or vacations until closing. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Because lenders are looking closely at your bank accounts, a large cash purchase is also not advised.

Don't go on a career search. Lenders look for a consistent job history on your application. Finding a new job (particularly one with a better paycheck) may not change your ability to qualify for your loan. But in some cases, switching jobs during the mortgage approval process may bring concern and affect your application.

Don't take your accounts to a new bank or move around your cash. Your lender will ask for recent bank statements for accounts in your name: checking, savings, money market, and other assets. To eliminate potential fraud, most lending institutions want detailed paperwork to determine the source of all cash. No matter the purpose, switching banks or moving money from one account to another might raise a red flag with your lender and slow down your application process.

Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your earnest money is yours, not the seller's up until closing. Your FSBO seller might not know that this good faith money should go toward your expenses upon closing. We recommend that you put the funds into a trust account, or get a neutral person, like an attorney to hold them until the closing of the sale. Your contract should document who keeps the deposit if the home purchase fails.

Harbor View Lending* a DBA of Megastar Financial can walk you through the pitfalls of getting a mortgage. Call us at (207) 571-8034.