Things to Avoid While Purchasing a Home

Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the lender approves the loan. Until your keys are in hand, there still remain some hoops to jump through. Here are some actions to refrain from before closing to be sure the transaction goes smoothly.

Don't throw your money around. Although you may be planning ways to turn your new home into a showplace, try to stay away from major purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and car purchases until the closing of your loan. Using plastic to buy furniture could jeopardize your loan process by distorting your numbers. Since lending institutions are perusing your financial accounts, a large cash purchase is also not advised.

Don't look for a new job. Stability in your work history is a good thing to lending institutions. Finding a new career (particularly one with a better salary) may not change your ability to qualify for a mortgage loan. However, if you switch careers before approval, your process could fail or be stalled.

Don't switch banks or move cash around in your bank accounts. Bank statements from the last two or three months for your accounts (savings, checking, money market, and other assets) will be analyzed as the lending institution makes decisions regarding your application. The lending institution wants to see a steady rise and fall of your funds over the pay period, in order to avoid fraud. Even for practical purposes, transferring finances or switching banks might make it harder for the lender to document your account history.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Your earnest money does not belong to the seller: it remains yours until closing. Although some individual sellers might not understand this, your earnest money must be used for your closing expenses. Find a lawyer or other neutral party who is able to hold the money or put it in a trust account until closing. Your contract should specify who keeps the deposit if the home purchase fails.

At Sky Apply Mortgage, Inc, we answer questions about this process every day. Give us a call at 8132007931.