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 says "yes" and the lender approves their loan. Until the keys are handed over, there still remain some hurdles to jump. Here are some actions to refrain from during the home buying process to be sure your transaction goes smoothly.
Don't buy big-ticket items. You may be itching to buy that new sofa for the soon-to-be-yours parlor, but it's advisable to avoid making big ticket buys like furniture, appliances, jewelry, or vacations until closing. Using plastic to buy new living room furniture could jeopardize your loan process by distorting your numbers. Using cash to buy big items can also be a mistake: many lenders look at your cash on hand when approving your mortgage loan.
Don't get a new career. Your recent job history should show stability. Finding a new job (especially one with a bigger paycheck) may not change your ability to qualify for your mortgage. However, if you switch careers before your loan is approved, your process could fail or be bogged down.
Don't change banks or move cash around in your bank accounts. Your lender will instruct the submission of recent bank statements for accounts in your name: checking, savings, money market, and other liquid assets. The lender looks for a consistent flow of your money each month, in order to rule out fraud. No matter the purpose, changing banks or transferring funds could raise a red flag with your lender and impede your application process.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Your good faith money does not belong to the seller: it remains yours until closing. Your good faith money is to go toward your expenses upon closing; some sellers may not realize this. We recommend that you put the deposit into a trust account, or get an attorney to hold it until the closing of the sale. Should your sale fall through, your purchase contract should dictate to whom the earnest money should go.
At Hawk Mortgage Group, we answer questions about this process every day. Give us a call at (443) 619-7900.