Don't Trip Yourself up While Buying your Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. Keep in mind that until you get the keys, your lender is watching your finances very closely. We have given you a list of things below you will want to stay away from when waiting for closing.
Don't make expensive purchases. Although you may be planning ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Using credit cards to buy furniture could jeopardize your loan process by changing your numbers dramatically. Using cash to purchase big items can even be an issue: many banks consider your cash reserve when approving your loan.
Don't get a new career. Consistency in your work history is a positive thing to lending institutions. Changing jobs may not compromise your ability to qualify for a loan - particularly if you are going to be making more money. However, if you switch careers before you qualify, your process could fail or be stalled.
Don't take your accounts to a new bank or move around your money. While your lending institution reviews your loan package, you will probably be asked to provide bank statements for recent months on your checking and savings accounts, money market funds and other liquid assets. Your lending institution hopes to see a steady rise and fall of your funds over the month, in the interest of avoiding fraud. Changing banks or moving finances to another account - no matter the reason - may make it harder for the lender to review your funds.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it is actually yours until closing. Some FSBO sellers might not realize that these good faith funds should be used for your expenses upon closing. An attorney or other type of neutral party can hold your deposit, or you may put it temporarily into a trust account until you close. The disposition of earnest money, if your home purchase falls through, should be indicated in the contract with your seller.
Harbor View Lending* a DBA of Megastar Financial can answer questions about these "Don'ts" and many others. Give us a call: (207) 571-8034.