Things to Avoid While Purchasing a Home

What's more fun than getting a bunch of new furniture to go in your future home? Not much. But making large purchases before your loan closes could be trouble. Until the house is really yours, there are still some hurdles to jump. Below you'll find a list of things to avoid during this critical time of your home purchase.

Don't empty your wallet on big-ticket items You may be itching to buy that new Turkish rug for the soon-to-be-yours living room, but it's best to stay away from making big ticket buys like furniture, appliances, electronic equipment, or vacations until your home loan closes. Your lender may send up red flags if you purchase new appliances on your credit cards in the middle of your loan process. It's also a bad idea to make those large purchases with cash. Lending Institutions are examining your cash on hand when considering your loan.

Don't go on a job search. Your recent job history should show stability. Getting a new job before you start the application process for a mortgage loan may not jeopardize your approval at all. But in some cases, switching jobs during the loan application process could raise concern and affect your approval.

Don't change banks or move finances around in your accounts. As the lending institution reviews your mortgage application, you will probably be asked to provide bank statements for the last few months on your checking accounts, savings accounts, money market funds and other liquid assets. To eliminate potential fraud, most lenders require a detailed paper trail to verify the source of all funds. No matter the reason, switching banks or transferring money might raise a red flag with the lender and slow down your application process.

Don't give cash directly to your seller (commonly in the case of of "for sale by owner") to be used as earnest money. Your good faith money does not belong to the seller: it is actually yours until closing. Any earnest money is to go toward your expenses upon closing; some individual sellers may not know this. We recommend that you put the deposit into a trust account, or get an attorney to hold it until the deal closes. Should your sale fall through, the purchase contract should document where the good faith deposit should go.

Sky Apply Mortgage, Inc can walk you through the pitfalls of getting a mortgage. Give us a call: 8132007931.