Don't Trip Yourself up While Buying a New Home
Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the lender approves the loan. There still remain a few major hurdles to jump before your loan closes. Here are some actions to refrain from during the home buying process to assure the transaction goes smoothly.
Don't throw your money around. You may be tempted to buy that new sofa for the soon-to-be-yours den, but it's best to avoid making major buys like furniture, appliances, electronic equipment, or cars until your home loan closes. Using plastic to buy furniture could jeopardize your lending process by altering your numbers dramatically. Because lenders are examining your financial accounts, a large cash purchase is also not advised.
Don't look for a new career. Your recent work history should show consistency. Getting a new career before you apply for a mortgage may not affect your approval at all. However, switching jobs in the middle of the loan process may influence whether or not you are approved.
Don't change banks or move finances around in your accounts. Your lending institution will ask for recent bank statements on all of your accounts: checking, savings, money market, and other liquid assets. To eliminate fraud, lenders want to see clear documentation of how you earn your living and where any additional wealth comes from. No matter the purpose, switching banks or transferring funds may raise a red flag with your lender and impede your qualification process.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your good faith money belongs to you, not the seller up until the deal closes. Any earnest funds are to be applied to your expenses upon closing; some sellers may not understand this. A neutral party, like an attorney can hang onto your funds, or you may put them temporarily into a trust account until closing. If your home purchase fails, the purchase contract should document where this 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.