Things to Avoid While Buying a Home
What's better than getting a bunch of new furnishings to adorn your future home? Nothing. But buying big ticket items before your loan closes can be an error. There still remain a few major hurdles to jump before closing. We have given you a list of actions below we suggest you stay away from when waiting for closing.
Don't make expensive purchases. Although you may be dreaming of ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you keep away from vacations and vehicle purchases until the closing of your loan. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Since lenders are examining your financial accounts, a large cash purchase is also a mistake.
Don't look for a new job. Stability in your work history is a positive thing to lenders. Getting a new career before you start the application process for a mortgage may not compromise your approval at all. However, switching careers during the application process could influence your approval.
Don't move finances around or change banks. Bank statements from the last few months for accounts in your name (checking, savings, money market, and other accounts) will probably be analyzed as the lending institution considers your mortgage application. In order to avoid fraud, lenders look for a consistent portrayal of how you earn your money and where any additional funds come from. Even for practical purposes, moving around money or changing banks may make it difficult for your lending institution to verify your bank history.
Don't give money directly to your seller (usually in cases of "for sale by owner") to be used as earnest money. As a rule, your good faith deposit belongs to you, not to the seller up until closing. Any good faith funds are to go toward your expenses upon closing; some sellers might not realize this. You'll need to put the money into a trust account, or get a neutral party, like a lawyer, to hold it until the closing of the sale. The disposition of good faith funds, in the case of a failed transaction, should be documented in the purchase agreement with your seller.
Northeast Bancorp of America, Inc. can walk you through the pitfalls of getting a mortgage. Give us a call: (440) 234-9660.