Don't Trip Yourself up While Buying a Home

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. Keep in mind that until your keys are in hand, your lender is watching your accounts very closely. Below you'll find a list of actions to avoid during this critical time of your home purchase.

Don't empty your wallet on big-ticket items Although you will be dreaming of ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and vehicle purchases until the closing of your loan. Your credit numbers could change suddenly if you purchase new furniture using plastic. Using cash to buy big items can also be an issue: most lenders consider your cash on hand when approving your mortgage.

Don't go on a career search. Stability in your work history is a positive thing to lenders. Changing jobs may not affect your ability to qualify for a loan - particularly if you are going to be making more money. However, if you switch careers before approval, your loan process could fail or be slowed down.

Don't change banks or move finances around in your accounts. Most lenders will require you to provide recent bank statements on all of your accounts: checking, savings, money market, and other liquid assets. To eliminate potential fraud, most lenders want a thorough paper trail to verify the source of all cash. Switching banks or moving funds elsewhere - no matter the reason - may make it harder for the lender to review your funds.

Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. As a rule, your good faith deposit is yours, not the seller's up until the sale is final. Although some individual sellers might not realize this, your good faith funds should go toward your closing expenses. An attorney or other type of neutral party can hang onto your funds, or you may put them temporarily into a trust account until closing. The disposition of good faith funds, in the case of a failed transaction, should be indicated in the contract with your seller.

Hawk Mortgage Group can walk you through the pitfalls of getting a mortgage. Call us at (443) 619-7900.

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