Don't Trip Yourself up While Buying a New Home
Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the loan is approved. It's wise to remember that until you get the keys, your lender is watching your finances very closely. Here are some things to stay clear of before closing to be sure the transaction goes well.
Don't throw your money around. Although you will be dreaming of ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or furniture. You will also want to keep away from vacations and car purchases until your loan closes. Financing your stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Because lenders are examining your financial accounts, a large cash purchase is also a mistake.
Don't look for a new job. Stability in your career history is a good thing to lending institutions. Changing jobs may not jeopardize your ability to qualify for a loan - especially if you are getting a better salary. But for some people, changing careers during the loan application process might bring concern and hinder your approval.
Don't move cash around or change banks. Most lenders will ask for recent bank statements of accounts in your name: savings, checking, money market, and other liquid assets. The lender will need to see a consistent rise and fall of your funds over the month, in the interest of ruling out fraud. No matter the purpose, changing banks or transferring money might raise a red flag with your lender and impede your loan process.
Don't give cash directly to your seller (commonly in the case of of "for sale by owner") for earnest money. Until closing, any good faith deposit remains yours. The good faith money is to go toward your expenses closing; some sellers might not understand this. Get an attorney or other neutral party who can hold the funds or place them in a trust account until you close. If your sale falls through, the purchase agreement should document where your good faith deposit should go.
Northeast Bancorp of America, Inc. can answer questions about these "Don'ts" and many others. Call us at (440) 234-9660.