10 THINGS YOU SHOULD NOT DO WHEN BUYING A HOME
1. Don't Make a Major/Large 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 the 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
cannot 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.
2. Don't Change Jobs Unless It's Necessary
Banks 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 keys to the house are in
3. 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 to be applied to
your expenses at closing.
I've heard many stories about sellers who
spent buyers' deposit money prior to closing.
When the transactions didn't take place for
valid reasons--such as financing or repair
problems, the buyers had to fight to retrieve
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
4. Don't Let Your Emotions Take Over
Keep a cool head during the entire closing
process, especially during and after an
inspection. Be realistic. No home is perfect,
especially older homes. Don't let the seller's
refusal to do a small repair kill the deal on
a home you truly love. It's not at all unusual
for new owners to take care of some repairs
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
absolutely sure you can handle it emotionally
and financially. Decide what type of repairs
you can realistically tackle, then stick with
5. 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
6. 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 won't be delayed.
In some locations, additional types of
insurance coverage might be necessary. Talk to
your lender about insurance requirements well
before the closing date.
7. Don't Become Best Friends with the
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.
8. Don't Panic if the Appraisal Comes in
At least not at first. There are some things
you (and your agent) can do to correct the
9. Don't Go It Alone
If you're working with an agent, it's the
agent's duty to help you make it to closing.
The agent should be tracking many of the day
to day details that involve the lender, the
seller, or the seller's agent.
10. 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--your closing
depends on it.