Things to Avoid While Buying a New Home

What's better than buying a bunch of new furnishings to adorn your future home? Nothing. But buying big ticket items before closing can be a misstep. It's wise to remember that until your keys are in hand, your lender is watching your finances very closely. We have listed some actions below you will want to stay away from when waiting for closing.

Don't throw your money around. You may be tempted to buy that new sofa for the soon-to-be-yours den, but it's best to avoid making large purchases like furniture, appliances, jewelry, or cars until your home loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. Using cash to purchase big items can even create an issue: most lending institutions take into consideration your cash reserve when approving your loan.

Don't look for a new job. Stability in your job history is a good thing to lenders. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - particularly if you are getting a better salary. However, switching jobs in the middle of your application process may influence your approval.

Don't move cash around or change banks. Bank statements from recent months for accounts in your name (savings, checking, money market, and other assets) will likely be reviewed as the lender makes decisions regarding your mortgage application. Your lending institution is looking for a steady flow of your money over the month, in the interest of avoiding fraud. No matter the purpose, switching banks or moving money from one account to another can raise a red flag with the lender and impede your qualification process.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith money does not belong to the seller: it is actually yours until the sale closes. The FSBO seller might not know that the good faith money is to be applied to your expenses upon closing. An attorney or other type of neutral party can hold onto your earnest funds, or you may place them temporarily into a trust account until you close. The purchase agreement should document to whom the money goes if the home purchase does not go through.

Sky Apply Mortgage, Inc can answer questions about these "Don'ts" and many others. Call us: 8132007931.

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