| What Not To Do When
Buying A Home |
You're buying a home, you're lender pre-approved, you've
made an offer that was accepted and all you're waiting
on is to close. The house is yours, right? Not always.
Regardless of how good the process has gone, even with
the end in sight, there are a few key things you should
avoid that can slow and even jeopardize |
| your purchase. |
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Don't Make a Major Purchase
You've just found out your credit is A+. That's great
news, because a new car would look fantastic in the
driveway of your new home. But hang on--if you are depending
on a mortgage to move in, you'd best wait until after
closing to buy that car.
An increase in your debt to income ratio reduces the
amount of monthly income available for your mortgage
payment.
If you tack on a higher car payment, the bank might
decide you can't afford the home.
Using cash to purchase the car could also create a problem,
since banks consider cash reserves when approving your
mortgage. If you must make a major purchase before closing,
talk to your loan officer before you do it. |
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Don't
Change Jobs Unless It's Necessary
Lenders like to
see a consistent job history. They aren't usually as nervous
if you change jobs within the same field, but it's better
to stay put until the house is yours. |
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Don't
Give an Earnest Money Deposit Directly to a For Sale By
Owner Seller
Your good faith deposit should go into a trust account.
Some for sale by owner sellers don't understand that
funds are not to be spent until closing.
I've heard many stories about sellers who spent the
deposit money prior to closing. When the transactions
didn't take place for valid reasons--such as financing
or repair issues, the buyers had to fight for a refund.
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.
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Don't
Let Your Emotions Take Over
Keep a cool head
during the entire home buying process, especially during
and after a home inspection. Be realistic. No home is
perfect, especially older homes. It's not unusual for
new owners to take care of some repairs themselves. Don't
let the seller's refusal to do a small repair kill the
deal on a home you truly love.
On the other hand, don't fall so much in love with the
house that you'll buy it no matter what needs to be done--unless
you're sure you can handle it emotionally and financially.
Decide what type of repairs you can realistically tackle,
then stick with the decision. |
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Don't
Forget to Switch Utilities
That sounds simple,
but you'd be surprised how many people forget to apply
for utility service at their new home. Call the utility
companies as soon as you have a contract. Find out how
many days lead time they need to switch the service, then
get back with them when you have a firm closing date.
Don't forget to discontinue services at your old home. |
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Don't
Forget to Line Up Your Hazard Insurance
A no-brainer, right? But it's another often-forgotten
task that buyers scramble to take care of at the last
minute. Before closing, your lender will want to see
an insurance binder showing you have coverage for the
new home. Get it as early as possible so that closing
isn't delayed. In some locations, additional types of
insurance coverage might be necessary. Talk to your
lender about insurance requirements well before the
closing date. |
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Don't
Become Best Friends with the Seller
I'll get some flack on this one. It's great to be friendly,
but don't get into too many long discussions with the
sellers, because personality conflicts often cloud judgments.
Remember, this is their home. You're no doubt excited
about moving in, and if you didn't like the house you
wouldn't have offered to buy it. But you'll make changes--everyone
does. A casual statement about "ripping up that
ugly carpet" might be hurtful enough to keep the
seller from negotiating with you about repairs or other
issues that crop up. |
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Don't
Panic if the Appraisal Comes in Low
At least not at
first. There are some things you (and your agent) can
do to correct the problem. Study your options. |
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Don't Go It Alone
If you're working
with an agent, it's the agent's duty to track many of
the day to day details that involve the lender, the seller,
or the seller's agent. Be sure your agent schedules a
final walkthrough just before closing. |
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Don't
Ignore Lender Requirements
Know what is expected
of you and take care of it. For instance, a Certificate
of Eligibility is required to move forward on a VA loan.
That's something you must handle yourself. Answer lender
questions and provide required paperwork as quickly as
possible--moving into your new home depends on it. |
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