Things to Avoid While Buying a New Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. There are still a few major hurdles to jump before closing. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't make expensive purchases. Although you may be dreaming of ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Using credit cards to buy new living room furniture could jeopardize your loan process by distorting your numbers. Because lending institutions are perusing your financial accounts, a large cash purchase is also a bad idea.
Don't look for a new career. Your recent job history should show stability. Finding a new job (particularly one with a better paycheck) may not jeopardize your ability to qualify for a mortgage loan. However, switching careers in the middle of your application process may influence your approval.
Don't take your accounts to a new bank or move around your cash. While the lender reviews your loan application, you will probably be required to submit bank statements for recent months on your checking and savings accounts, money market accounts and other liquid wealth. To detect potential fraud, most lending institutions need a detailed paper trail to verify the source of all incoming funds. No matter the reason, moving banks or transferring money could raise a red flag with the lender and slow down your application process.
Don't give funds directly to your seller (generally in the case of of "for sale by owner") for earnest money. Your earnest money does not belong to the seller: it remains yours until closing. Your good faith funds are to go toward your expenses upon closing; some FSBO sellers might not realize this. We recommend that you put the money into a trust account, or get a neutral party, like a lawyer, to hold it until the closing of the sale. If your sale falls through, your contract with the seller should document to whom the good faith funds should go.
Hawk Mortgage Group can walk you through the pitfalls of getting a mortgage. Call us: (443) 619-7900.