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 error of taking their enthusiasm straight to the mall or furniture store. Until the keys are handed over, there are still some hoops to jump through. Here are some actions to refrain from before closing to assure the transaction goes smoothly.
Don't buy big-ticket items. You may be tempted to order that new sofa for the soon-to-be-yours den, but it's advisable to avoid making large purchases like furniture, appliances, electronic equipment, or vacations until your home loan closes. Financing new Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. It's even a mistake to make those big purchases using cash. Lenders are examining your cash reserve when considering your loan.
Don't look for a new career. Lenders feel comfortable seeing a consistent work history on your paperwork. Finding a new job (especially one with a bigger salary) may not jeopardize your ability to qualify for your mortgage. However, if you switch careers before your loan is approved, your mortgage process could fail or be stalled.
Don't move finances around or change banks. Bank statements from recent months for your accounts (checking, savings, money market, and other accounts) will likely be studied as the lending institution makes decisions regarding your mortgage application. Your lender needs to see a consistent rise and fall of your money over the month, in order to avoid fraud. Even for practical reasons, transferring cash or changing banks may make it harder for your lending institution to confirm your account history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. As a rule, your earnest money is yours, not the seller's until closing. Some sellers might not realize that your earnest money should go toward your expenses at closing. A neutral party, like an attorney can hold onto your funds, or you may place them temporarily into a trust account until closing. The final disposition of good faith funds, in the case of a failed transaction, should be documented in the contract with the seller.
Northeast Bancorp of America, Inc. can walk you through the pitfalls of getting a mortgage. Give us a call: (440) 234-9660.