With the excitement of knowing you will soon purchase one of the prized San Diego luxury homes for sale you may be tempted to do things like buy all new appliances, a new car, or find a variety of other things to spend your money on.
While you may not think that these random expenses hurt your chances of buying San Diego luxury homes, they actually do! Not only will they put a dent your savings account, but potentially alter your debt–to–income ratio to the point where you qualify for a lower loan amount.
To help you avoid making costly mistakes that hinder your chances of buying San Diego luxury homes, I’ve compiled a list of things you should NOT do before (or while) you’re conducting your San Diego luxury home search:
#1 – Do NOT Buy a New Car
Although the idea of having a brand new car sitting in your new San Diego luxury home driveway sounds like a dream come true, buying that new car during the home buying process can hurt you in the long run. Lenders look at your debt–to–income ratio (% of gross monthly income BEFORE taxes spent on debt) and if you tack on a higher car note than your ability to qualify for a mortgage will suffer as a result. Get the San Diego luxury home of your dreams FIRST and the car later.
#2 – Do NOT Change Banks
During the loan approval process, lenders review all of your funds and any money related activity. At the very least you will provide the last two or three months of statements on checking accounts, savings accounts, 401k and retirement accounts, money market funds, stock statements, etc. Switching banks will not only make it difficult for you to obtain records, but slow the home buying process down.
#3 –Do NOT Move Money Around
Underwriters will be thoroughly inspecting your paper trail, so avoid doing any unnecessary money movement while your liquid assets are being reviewed to make things go smoother. Be ready to produce deposit receipts, cancelled checks, and other seemingly insignificant paperwork that they will need to properly document your loan files.
#4 – Do NOT Change Jobs
Unless you are a full–time salaried employee or an hourly employee working a full 40–hour week, it would be best if you kept your current job until after you’ve bought your new San Diego luxury home. Since every detail of your financial and employment status are being scrutinized by lenders, you do not want to give them any reason to hike up your interest rate or reject your loan application. If you’re a commissioned, part–time, or self–employed individual, its better you hold off until you’ve successfully purchased your San Diego luxury home.
#5 – Do NOT Buy Expensive Appliances or Furniture
Although you may be tempted to go out and buy a slew of new appliances and furniture to fill in your new San Diego luxury home, it would be best to wait until after you close escrow. Buying appliances and furniture beforehand could result in you being knee-deep in debt or even spending money that you may need for the down payment and closing costs. Wait until after you close on the San Diego luxury home of your dreams and buy appliances and furniture after the dust settles.
Ready to start looking through San Diego luxury homes for sale to find your dream home? Feel free to start your San Diego luxury home search online and let me know if you need assistance getting started.
Photo Credit: moonjazz
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