Don't Trip Yourself up While Buying a Home

What's more fun than getting a bunch of new stuff to adorn your future home? Nothing. But making big ticket purchases before closing can be a mistake. There still remain a few major hurdles to jump before closing. Below you'll find a list of things to avoid during this critical time of your home purchase.

Don't throw your money around. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but keep away from big purchases like furniture, cars, appliances, or vacations until the loan closes. Your lender may send up red flags if you purchase new appliances on your credit cards during your loan process. It's also a red flag to make those large purchases using cash. Lending Institutions are examining your available cash when considering your loan.

Don't get a new job. Your recent career history should show consistency. Getting a new job may not jeopardize your ability to qualify for a loan - particularly if you are improving your salary. However, if you switch careers before approval, your loan process could fail or be slowed down.

Don't switch banks or move money around in your accounts. While your lending institution considers your mortgage loan application, you will probably be required to provide bank statements for the last few months for your checking accounts, savings accounts, money market accounts and other liquid finances. Your lending institution wants to see a steady rise and fall of your money over the month, in order to rule out fraud. Even for practical purposes, moving around money or switching banks might make it difficult for the lender to document your account history.

Don't give money directly to your seller (commonly in cases of "for sale by owner") to be used as a "good faith" deposit. Until the completion of the deal, the good faith deposit remains yours. Although some individual sellers might not realize this, your good faith funds must go toward your closing expenses. Find a lawyer or other neutral party who can hold the funds or put them in a trust account until you close. Should your home purchase fail, the purchase agreement should indicate to whom the earnest money should go.

Northeast Bancorp of America, Inc can answer questions about these "Don'ts" and many others. Give us a call at 4402349660.