Pre-Closing DON'T List

Four Do-not-do Tips When Buying a Home After you’ve found a home that you love, and you’ve placed an offer that the sellers accepted, and you’ve been pre-approved for a mortgage- you might think buying the property is guaranteed. It isn’t! Before the closing, things are still uncertain until the deed has been recorded, and you hold the keys to the home in your hand! Here are 4 things to avoid when you are awaiting the closing of your home, as doing them may stop or slow down the process of buying the property. 1) Don’t Buy Something Big! When you are applying for a mortgage, you have to verify your credit history and you’ll receive your credit score. If you have learned that you have amazing credit, be proud, but don’t go out and buy a new car or other equally expensive purchase until after the closing! Buying a high priced item that will require monthly payments will increase your debt to income ratio. Your mortgage lender may decide this new expense causes you to be unable to afford the home. Even if you happen to have enough money saved in a bank account to purchase a new vehicle or other high priced item without financing, could cause problems. Mortgage lenders take into account the amount of money you have available to you in all of your different accounts, and if you take a large amount of it out and purchase something, you are changing the availability of funds. 2) Don’t Give a For-Sale-By-Owner Seller a Deposit You might think it’s a good idea to place a deposit on a home for sale by owner while waiting for the closing to take place- but what happens if the sellers spend that money and then the closing falls through for some reason? You’ll end up having to fight for a refund of that deposit. It’s better to make a deposit to a neutral third party, such as an attorney, with a contract that clearly outlines what is to happen with that money if the closing falls through. 3. Don't Change Employment Part of the approval process for a mortgage involves considering your job history. Many require that you have worked in the same job for two or more years. While most lenders wouldn’t bat an eye if you changed jobs within the same field, completely changing your line of work might send up a red flag and cause issues with closing. If possible, avoiding changing your employment until after the closing has taken place! Find an attorney or other neutral party who will hold the deposit for you until closing day and make sure your contract dictates what happens to the funds if the transaction doesn't close. 4) Don’t Forget Hazard Insurance One of the often forgotten tasks that a buyer must handle prior to the closing is obtaining hazard insurance. Check with your lender for any additional types of insurance that is necessary before the closing date as well, to make sure you take care of all of it before you attend your closing to prevent delays.