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Articles  >>  Things Not To Do Before Purchasing A Home

Things Not to Do Before Purchasing a Home

You’ve decided to buy a home, found the right one, and are now just awaiting closing. Before making any major decision, you should think about how it may affect your chances of getting your loan financed.

Here are a few things to think twice about when purchasing a home:

Don’t Make Any Large Purchases

Buying a home is exciting. You may want to get started on shopping for your home before you move into it, and start to look for furniture, appliances, and other necessary items to make your new house comfortable. However, if it creates debt in any way, you may want to think twice about it. You should also avoid purchasing cars, jewelry, and any other large ticket items. Doing so will increase your debt to income ratio and jeopardize your chances of getting financed.

Don’t Be Irresponsible with Your Credit

It’s important to keep your credit score steady throughout the home-buying process. You should continue to pay your bills on time and responsibly. You should also avoid inquiries on your credit report. Don’t open new credit accounts, even if you don’t plan on taking on new debt. This includes cosigning on a loan for someone else. Even though you aren’t the one making the payments, your credit is still being inquired about and will increase YOUR debt to income ratio.

Don’t Change Employers

If you are planning on purchasing a home, don’t think about changing your job in the middle of it. In order to get financed, you will most likely have to show you’ve been employed for a certain period of time. Changing jobs will show instability and hurt the chances of getting approved.

Don’t Move Money Around

Keep your money where it’s at. Don’t make any sudden or large changes with your banking. This includes large deposits and withdrawals, a change of banks, and consolidating accounts. Your lender will most likely require a history and ledger of all of your finances. To show responsibility, stability, and reliability it’s important to keep things where they are. 

A lender will also be concerned about the source of your down payment. Lenders may want to see that you have the necessary funds beforehand in order to ensure they aren’t taking a risk when loaning you the money. Some lenders may require the amount of money to be deposited a couple months before closing.

Don’t Lie

To get financed, you must be completely honest on your loan application. Making any adjustments such as not reporting certain debts, lying about income, or job history is going to slow down and hurt any chance of getting financed. It’s also fraud, so just don’t do it. Your lender will find out regardless, so avoid any pitfalls by being honest.

 


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