What to Avoid During your Home Purchase

What's more fun than getting a bunch of new furnishings to go in your future home? Nothing. But buying big ticket items before your loan closes can be a mistake. Until the house is really yours, there are still some hurdles to jump. Below you'll find a list of things to stay away from during this critical time of your home purchase.

Don't make expensive purchases. It may be tempting to order that new sofa for the soon-to-be-yours parlor, but it's advisable to stay away from making big ticket buys like furniture, appliances, electronic equipment, or cars until closing. Using plastic to buy furniture could jeopardize your lending process by distorting your numbers. Using cash to buy big-ticket items can also be an issue: most banks take into consideration your available cash when approving your mortgage.

Don't get a new career. Stability in your job history is a positive thing to banks and other lenders. Getting a new job may not compromise your ability to qualify for a loan - especially if you are getting a bigger paycheck. But in some cases, changing careers during the mortgage approval process may bring concern and stymie your application.

Don't move cash around or switch banks. Bank statements from the last two or three months for all of your accounts (checking, savings, money market, and other accounts) will be reviewed as the lender makes decisions regarding your application. In order to avoid fraud, lenders need a clear and consistent picture of how you earn your money and where any additional wealth comes from. Even for practical reasons, moving around cash or switching banks might make it more difficult for your lending institution to verify your account history.

Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it is actually yours until the transaction is final. Although your seller might not realize this, your good faith funds must go toward the buyer's closing expenses. Find an attorney or other neutral person who can hold the funds or place them in a trust account until closing. The final disposition of earnest money, in the case of a failed transaction, should be included in the purchase agreement with your seller.

At Sky Apply Mortgage, Inc, we answer questions about this process every day. Give us a call: (813) 200-7931.

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