What to Avoid During a Home Purchase

Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the loan is approved. Keep in mind that until your keys are in hand, your lender is watching you very closely. Below you'll find a list of things to avoid during this critical time of your home purchase.

Don't overspend on big-ticket items Although you may be dreaming of ways to turn your new house into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. We also recommend that you keep away from vacations and car purchases until your loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. Because lending institutions are reviewing your bank accounts, a large cash purchase is also a bad idea.

Don't get a new career. Lending Institutions like to see a consistent work history on your application forms. Getting a new job may not jeopardize your ability to qualify for a loan - particularly if you are going to be making more money. However, switching careers in the middle of the application process could affect your approval.

Don't take your accounts to a new bank or move around your finances. Your lender will instruct the submission of recent bank statements on your accounts: checking, savings, money market, and other liquid assets. To detect fraud, lenders want to see a clear and consistent picture of how you earn your living and where additional wealth comes from. No matter the purpose, switching banks or moving money from one account to another could raise a red flag with the lender and slow your loan process.

Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's until the deal closes. Your earnest money is to be applied to your expenses upon closing; a FSBO seller may not understand this. A neutral party, like an attorney can hold your earnest money, or you may put it temporarily into a trust account until you close. The disposition of good faith funds, if your sale fails, should be indicated in the purchase agreement with the seller.

At Sky Apply Mortgage, Inc, we answer questions about this process every day. Call us: 8132007931.