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Ten “No
No’s” for the Home Buyer
There are several things
that should be avoided before purchasing a home. If you
aren’t careful to avoid these common mistakes, it is possible
that your closing will be delayed or even canceled. Your
adherence to the following rules will put the keys to the house in your
hands quickly.
First, don’t damage your debt to income ratio by making a
major purchase before closing. If you decide you
can’t live without that brand new BMW, you might have to wait
on owning a home. The bank could easily determine that your
sky high car payment would hinder your ability to pay your
mortgage. Wait until after you get the house to do some
spending. No one expects a brand new house full of furniture
and a sports car in the driveway unless you are a famous sports figure
or Donald Trump.
Secondly, don’t change jobs if you don’t have
to. The lenders like to see consistency versus constant job
hopping. If you are just miserable with your job, maybe you
can switch to a different job within the same field. Or you
can tough it out until you have the house and then start putting out
resumes.
Also, you should never surrender your earnest money to a For Sale by
Owner Seller. There isn’t anything stopping the
sellers from spending the money before the transaction goes
through. If the deal should fall through, the buyers would
have to fight tooth and nail to get that deposit back. You
should put the deposit into a trust account. You should be
able to find an attorney willing to hold the deposit for you until the
transaction is finalized. Your contract needs to state what
will happen to the deposit in the event that the transaction falls
through.
In addition, never let emotions guide you. Stay practical and
realistic during the home buying process. Some sellers are
willing to fix some of the problems with the home and others may not be
as willing. Don’t let that refusal close the door
on your dream home. Conversely, you shouldn’t let
your loyalty to the home blind you to costly repairs down the
road. You certainly don’t want to be in a money pit.
Furthermore, don’t forget to have the utilities
activated. The utility companies might need a few days to
switch the service. Don’t forget to cancel the
service at the old residence. That seems simple enough, yet
many people forget that step entirely.
Another costly mistake might be forgetting to secure hazard
insurance. Talk to your insurance company right away because
the lender will want to see proof of coverage for the new home at
closing. Failing to line up the insurance will lead to delays
in closing.
You should not get too personal with the seller. After all,
this is a business transaction, so it should be treated
professionally. If you get into too many personal
discussions, you might say something that could be taken the wrong way
by the seller. 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. You should be friendly, but professional.
If the appraisal comes in too low, don’t freak out.
There are several solutions to this dilemma. The seller might
be willing to come down on the price of the home. The buyer
can put more money down if they are committed to that home.
The buyer and seller can negotiate the deal or the appraisal can be
disputed.
Don’t forget to use your agent. It is the
agent’s job to keep up with the daily details of the deal,
including the lender, the seller, and the seller’s
agent. It is also your agent’s responsibility to
set up a final walkthrough prior to closing.
Lastly, don’t forget to take care of your end of the
deal. You must be on the same page as the lender.
Provide them with the paperwork they need and answer their questions in
a timely manner. Failure to do so will keep you from opening
the front door of your new home.
These are some of the most common mistakes home buyers make.
Educating yourself about the process will ensure a smoother transaction
and a definite housewarming party.
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 Destiny
Mortgage Is a Licensed first and second mortgage broker with the
wisconsin dept of financial institutions. This is not a commitment to
lend. Restrictions may apply. Information is subject to change without
notice. All loans are subject to credit approval. Equal Housing
Opportunity. |
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