y, you are leaving work to eat lunch when you see there is a message on your cell phone from the loan processor at the mortgage company. It turns out that part of the income your loan officer used for qualifying was overtime pay and a yearly bonus. Your employer has filled out the Verification of Employment forms and returned them to the mortgage company indicating that you are receiving overtimDo you have $1000 to throw away?

I know you think I am crazy to even ask that question, but countless potential first time home buyers do exactly that every day.

Here is how the story typically goes.

You have decided to buy your first home and you have stopped by all the convenience stores and picked up copies of all the local real estate advertisement books. Now you are anxiously studying the pages to locate a home you like. Most of the homes in the books are already sold when you call, but one real estate agent has the perfect home for sale in exactly the area you want.

The agent runs a few numbers for you and happily tells you should qualify for a loan. He lets you know that this home is new to the market and three other couples looked at it today, so if you want it you better hurry up and get it "under contract". You make an offer and the sellers accept it. You have 3 days to make your application for a mortgage and 7 days to have a home inspection completed.

At the time you make your application for the mortgage, the lender you are sent to collects a check for the credit report and the appraisal. Everything looks great for the mortgage. Later that afternoon, you meet with the real estate agent and the home inspector. The home inspector needs a check before he will give you his inspection report.

The next morning, the appraiser visits the home and measures and takes pictures. Everything is rolling along like a charm. You start getting quotes from the moving company and arranging to transfer the utilities.

On the tenth day, you are leaving work to eat lunch when you see there is a message on your cell phone from the loan processor at the mortgage company. It turns out that part of the income your loan officer used for qualifying was overtime pay and a yearly bonus. Your employer has filled out the Verification of Employment forms and returned them to the mortgage company indicating that you are receiving overtim

sly studying the pages to locate a home you like. Most of the homes in the books are already sold when you call, but one real estate agent has the perfect home for sale in exactly the area you want.

The agent runs a few numbers for you and happily tells you should qualify for a loan. He lets you know that this home is new to the market and three other couples looked at it today, so if you want it you better hurry up and get it "under contract". You make an offer and the sellers accept it. You have 3 days to make your application for a mortgage and 7 days to have a home inspection completed.

At the time you make your application for the mortgage, the lender you are sent to collects a check for the credit report and the appraisal. Everything looks great for the mortgage. Later that afternoon, you meet with the real estate agent and the home inspector. The home inspector needs a check before he will give you his inspection report.

The next morning, the appraiser visits the home and measures and takes pictures. Everything is rolling along like a charm. You start getting quotes from the moving company and arranging to transfer the utilities.

On the tenth day, you are leaving work to eat lunch when you see there is a message on your cell phone from the loan processor at the mortgage company. It turns out that part of the income your loan officer used for qualifying was overtime pay and a yearly bonus. Your employer has filled out the Verification of Employment forms and returned them to the mortgage company indicating that you are receiving overtim

want it you better hurry up and get it "under contract". You make an offer and the sellers accept it. You have 3 days to make your application for a mortgage and 7 days to have a home inspection completed.

At the time you make your application for the mortgage, the lender you are sent to collects a check for the credit report and the appraisal. Everything looks great for the mortgage. Later that afternoon, you meet with the real estate agent and the home inspector. The home inspector needs a check before he will give you his inspection report.

The next morning, the appraiser visits the home and measures and takes pictures. Everything is rolling along like a charm. You start getting quotes from the moving company and arranging to transfer the utilities.

On the tenth day, you are leaving work to eat lunch when you see there is a message on your cell phone from the loan processor at the mortgage company. It turns out that part of the income your loan officer used for qualifying was overtime pay and a yearly bonus. Your employer has filled out the Verification of Employment forms and returned them to the mortgage company indicating that you are receiving overtim

r that afternoon, you meet with the real estate agent and the home inspector. The home inspector needs a check before he will give you his inspection report.

The next morning, the appraiser visits the home and measures and takes pictures. Everything is rolling along like a charm. You start getting quotes from the moving company and arranging to transfer the utilities.

On the tenth day, you are leaving work to eat lunch when you see there is a message on your cell phone from the loan processor at the mortgage company. It turns out that part of the income your loan officer used for qualifying was overtime pay and a yearly bonus. Your employer has filled out the Verification of Employment forms and returned them to the mortgage company indicating that you are receiving overtim

y, you are leaving work to eat lunch when you see there is a message on your cell phone from the loan processor at the mortgage company. It turns out that part of the income your loan officer used for qualifying was overtime pay and a yearly bonus. Your employer has filled out the Verification of Employment forms and returned them to the mortgage company indicating that you are receiving overtime pay regularly now, but only for the past 14 months and you are not guaranteed to receive your bonus this year. In addition, when the processor has uncovered that you have a loan against your 401K retirement account which the loan originator did not include on your application. You did not think this was significant. After all, you had "borrowed" money from yourself and you are simply replenishing your retirement account.

Because of these changes, you can no longer be approved for the mortgage you applied for. However, you do qualify for a different mortgage with a much higher interest rate that is fixed for two years. You will be eligible to refinance at the end of a year and hopefully you will qualify for a better loan at that time.

After much thought and consideration, you decide that you just do not feel comfortable with that higher payment and you do not like the uncertainty of hoping that you are able to refinance when the time comes. So you reluctantly back out of the contract. Luckily, because you did not qualify for the loan you will receive your earnest money deposit back. However, it will take an extra week while everyone pressures you to go ahead with the higher payment loan as they get the signatures necessary to cancel your contract.

It is now 10 days into the home buying process and you are out approximately a thousand dollars that you will never see again. You are waiting for the return of your earnest money and your own bank will probably put a three day hold on the check when you deposit it. So you have to bring bologna sandwiche