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 furniture store. There still remain a few major hurdles to jump before the house is realy yours. Here are some actions to avoid during the home buying process to assure your transaction goes well.
Don't buy luxury items. Although you may be planning ways to turn your new house into a showplace, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you keep away from vacations and car purchases until the closing of your loan. Financing your Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Using cash to buy big items can also create an issue: most lenders take into consideration your cash on hand when approving your loan.
Don't get a new job. Your recent job history should show consistency. Finding a new job (particularly one with a bump in salary) may not affect your ability to qualify for your mortgage loan. However, switching jobs during your loan process may affect your approval.
Don't switch banks or move finances around in your bank accounts. While your lender considers your loan package, you will probably be asked to submit bank statements for the last few months on your checking and savings accounts, money market funds and other liquid wealth. In order to detect fraud, lenders require a consistent portrayal of how you earn your money and where additional wealth comes from. Even for innocent reasons, moving around cash or switching banks might make it difficult for your lending institution to verify your account history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until the sale is complete, the good faith deposit remains yours. Your seller might not realize that this good faith money is to go toward your expenses upon closing. Get a lawyer or other neutral person who will hang on to the money or place it in a trust account until closing. Your contract should specify to whom the funds go if the home purchase does not go through.
Hawk Mortgage Group can walk you through the pitfalls of getting a mortgage. Give us a call: (443) 619-7900.