Things to Avoid When Buying Sedona AZ Real Estate

So you have been thinking about buying a house. There are some things to know and avoid before buying or applying for a loan. Some of these can happen months before you actually find a home so it's a good idea to be fully prepared before buying Sedona real estate.

Several months prior to applying for a loan you will want to start setting funds aside for the purchase. Maybe you have already done this and if so, great. If not, there is no better time to start then as soon as you can. Lenders will look at your assets and how much you have in the bank. This can help determine if you are a responsible and low risk applicant for a loan. If you have just a couple bucks in your checking acount and none in savings, this puts you at high risk to lenders should something happen to your income and you can't make the mortgage.

Set aside as much as you can before you choose your home. You will need funds for the earnest money deposit, inspection costs, closing costs and a possible down payement. Some of these can be built into the cost of the home but don't cut it too close if you don't have to.

When an underwriter reviews your loan for pre-approval, one of the things they look for is where the funds come from for your down payment and closing costs. Typically, you will be asked to supply bank statements for the last two or three months on any of your liquid assets. This includes checking accounts, savings accounts, money market funds, certificates of deposit, stock statements, mutual funds, and possibly your job's 401K and retirement accounts.

If you moved funds between accounts within that time, there may be large deposits and withdrawals in some of the accounts. This worries lenders that you may be unstable.

The loan underwriter will usually require a complete paper trail of all the withdrawals and deposits. You may be asked to supply cancelled checks, deposit receipts, and other trivial data, which could get quite detailed. This is not the time to change banks either as any major changes can affect how the loan is set up.

You also don't want to make any other large purchases at this time. Don't buy a car or take out financing on furniture, school loans or any other large dollar amount purchases. Banks don't want to think you are getting in over your head and can't afford the mortgage payment which needs to be the priority payment each month.

For more information on preparing yourself to buy Sedona homes or property please contact us today. We would be happy to help get you started down the right path to homeownership.