What to Avoid During a Home Purchase
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 appliance store. Until your keys are in hand, there are still some hoops to jump through. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't overspend on big-ticket items You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but stay away from major purchases like furniture, cars, appliances, or vacations until the loan closes. You may send up red flags with your lender if you finance your furniture on your credit cards in the middle of your loan process. It's also a mistake to make those large purchases using cash. Lending Institutions are looking at your available cash when considering your loan.
Don't get a new career. Your recent work history should show consistency. Getting a new job before you apply for a mortgage loan may not affect your approval at all. However, if you switch careers before you qualify, your process could fail or be stalled.
Don't switch banks or move money around in your bank accounts. While the lender considers your mortgage loan package, you will probably be asked to provide bank statements for the last few months for your checking accounts, savings accounts, money market accounts and other liquid assets. Your lending institution looks for a steady flow of your money over the month, in the interest of avoiding fraud. No matter the purpose, switching banks or moving funds from one account to another can raise a red flag with your lender and slow down your qualification process.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. As a rule, your earnest money belongs to you, not the seller until the sale is final. Your seller might not know that the good faith money is to be applied to your expenses at closing. You'll want to put the deposit into a trust account, or get a neutral party, like a lawyer, to hold it until the deal closes. The contract should indicate who keeps the money if the home purchase fails.
Hawk Mortgage Group can walk you through the pitfalls of getting a mortgage. Call us: (443) 619-7900.