Don't Trip Yourself up While Buying a Home

With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. It's wise to remember that until you get the keys, your lender is watching you very closely. We have listed some things below we suggest you stay away from when waiting for your loan to close.

Don't buy big-ticket items. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but stay away from expensive purchases like furniture, cars, appliances, or vacations until your loan closes. Your lender may send up red flags if you finance your electronics on your credit cards in the middle of your loan process. Using cash to purchase big-ticket items can even be a problem: most banks look at your available cash when approving your mortgage loan.

Don't go on a career search. Your recent job history should show consistency. Getting a new job before you apply for a loan may not get in the way of your approval at all. But in some cases, changing careers during the mortgage approval process might raise concern and stymie your approval.

Don't take your accounts to a new bank or move around your cash. Bank statements from the last few months for all of your accounts (savings, checking, money market, and others) will likely be reviewed as the lender makes decisions regarding your approval. To avoid potential fraud, most lending institutions need a detailed paper trail to verify the source of all funds. Switching banks or moving finances to another account - for whatever purpose - might hinder the review of your funds.

Don't give money directly to your seller (generally in cases of "for sale by owner") to be considered earnest money. Until closing, the good faith deposit remains yours. Any earnest money is to be used for your expenses upon closing; some individual sellers might not understand this. Get an attorney or other neutral party who will hold the funds or put them in a trust account until closing. The purchase contract should document to whom the funds go if the transaction fails.

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