What to Avoid During your Home Purchase
Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the loan is approved. There are still a few major hurdles to jump before the keys are handed over. We have given you a list of actions below you will want to avoid when waiting for your loan to close.
Don't buy luxury items. It may be tempting to order that new sofa for the soon-to-be-yours parlor, but it's best to stay away from making large buys like furniture, appliances, jewelry, or vacations until your home loan closes. You may send up red flags with your lender if you buy your appliances on your credit cards during your loan process. Because lending institutions are perusing your bank accounts, a large cash purchase is also a mistake.
Don't look for a new career. Your recent career history should show stability. Finding a new job (especially one with a better salary) may not affect your ability to qualify for your mortgage. However, if you switch careers before approval, your process could fail or be slowed down.
Don't take your accounts to a new bank or move around your finances. Most lenders will instruct the submission of recent bank statements on all of your accounts: checking, savings, money market, and other liquid assets. Your lender will need to see a consistent rise and fall of your funds each month, in the interest of avoiding fraud. No matter the reason, changing banks or transferring funds could raise a red flag with your lender and impede your qualification process.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money is yours, not the seller's until the deal closes. Although your FSBO seller might not realize this, the earnest money should be used for your closing expenses. Get a lawyer or other neutral person who is able to hang on to the deposit or place it in a trust account until closing. The final disposition of earnest funds, if your transaction falls through, should be included in the contract with the seller.
Northeast Bancorp of America, Inc. can answer questions about these "Don'ts" and many others. Give us a call at (440) 234-9660.