Are you a Home Buyer looking to purchase a home sometime soon? If yes, there are several things you should avoid when you enter the home-buying process. And if you aren't careful to avoid them, your closing could be delayed or canceled. Adherence to the following rules will quickly put the house's keys in your hands.
One. Don't damage your debt-to-income ratio - making a significant purchase before closing can compromise how much home you can afford to buy. If you decide you must have a brand-new $40,000 car, you might have to wait to buy a home.
The bank could quickly determine that your sky-high car payment disqualifies you for a new mortgage. It's best to wait until you get a new house to make such purchases. No one expects a brand-new home, furniture, and a new car in the driveway unless you are rich and famous.
Two. Don't change jobs - do it only if you have to. Lenders like to see consistency, not job hopping from job to job. However, if you are miserable in your current position, you can switch to a different one within the same field. Toughing it out until you have the house works best. Then you can start putting out resumes.
Three. Never surrender deposit money to a For Sale by Owner Seller, as nothing stops them from spending it. And if the deal falls through, you could become embroiled in an ugly dispute trying to get that deposit back.
Instead, buyers should place the deposit money in a trust account—precisely, one of an attorney or closing agent. Your Realtor can help you find reputable ones. Specify what happens to the deposit if the transaction falls through in the contract.
Four. Don't be guided by your emotions when it comes to costly repairs. Stay practical and realistic during the home-buying process. While some sellers might be willing to fix some of the problems with the home, others won't.
While this isn't a deal breaker, you shouldn't let your desire for a particular home blind you. The last thing you need is a home that keeps taking your money.
Five. Don't forget to activate the utilities. Utility companies typically need a few days to turn the services on. Also, remember to cancel the service at your old residence. While this seems simple enough, many people need to remember these steps.
Six. Remember to get hazard insurance. Another costly mistake a home buyer might make is not remembering to get hazard insurance. Lenders will want proof of coverage for the new home. Having it will help to keep your closing on the right track.
Seven. Do not get too personal with the seller. After all, buying a home is a business transaction, so you should treat it professionally. If you get into too many private discussions, you might say something the seller could take the wrong way.
You might have been joking about the ugly green carpet in the guest bedroom, but the seller might have taken that as offensive. In the end, it could hurt the dynamics of the transaction. It's best to be friendly but at arm's length.
Eight. Don't freak out if the appraisal comes in low. There are several solutions to this dilemma. The seller might reduce the negotiated price of the home, or the buyer can put more money down if they are committed to that home. Also, the buyer and seller can dispute the appraisal.
Nine. Don't hesitate to use your agent. It is their job to keep up with the daily details of the deal, including the lender, the seller, and the seller's agent. Your agent is also responsible for setting up a final walk-through before closing.
Ten. Don't forget to take care of your end of the deal. You must be on the same page as the lender. Submit the required paperwork they need and answer their questions on time. Failure to do so will keep you from opening the front door of your new home.
Summarily, these are some of the most common mistakes home buyers make. Educating yourself about the process will ensure a smoother transaction and a satisfying home-buying experience.