Things to Avoid While Buying a New Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the lender approves their loan. 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 empty your wallet on big-ticket items Although you will be listing ways to turn your new house into a castle, avoid major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until your loan closes. Using credit cards to buy furniture could jeopardize your lending process by altering your numbers dramatically. Since lending institutions are examining your bank accounts, a large cash purchase is also a mistake.
Don't go on a career search. Your recent career history should show consistency. Getting a new job may not affect your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. However, if you switch careers before approval, your mortgage process could fail or be bogged down.
Don't switch banks or move finances around in your bank accounts. Your lending institution will ask for recent bank statements of your accounts: checking, savings, money market, and other assets. To eliminate potential fraud, most lending institutions require a detailed paper trail to determine the source of all cash. No matter the reason, moving banks or moving money from one account to another could raise a red flag with your lender and impede your qualification process.
Don't give money directly to your seller (generally in the case of of "for sale by owner") for a "good faith" deposit. Your earnest money does not belong to the seller: it remains yours until the transaction is final. The good faith money is to be applied to your expenses upon closing; the FSBO seller may not realize this. Get an attorney or other neutral person who is able to hold the funds or place them in a trust account until you close. If your transaction fails, the purchase agreement should specify to whom this good faith deposit should go.
Hawk Mortgage Group can walk you through the pitfalls of getting a mortgage. Give us a call at (443) 619-7900.