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You have a contract, now here's what NOT to do!
1. Don't Make a Major Purchase
If you are depending on a mortgage to move in, don’t make any major purchases until after the closing on the home (fight the urge to get a new car to put in your new driveway). Though you may have been pre-qualified for a mortgage, a sizeable purchase changes your debt to income ratio, and may impact your credit score.
An increase in your debt to income ratio reduces the amount of monthly income available for your mortgage payment. 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
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 keys to the house are in your hand.
3. Don't Let Your Emotions Take Over
Be realistic. No home is perfect, especially older homes. If the seller refuses to do a small repair, don’t let it kill the deal on a home you truly love, realize It's not unusual for new owners to take care of some repairs themselves. Keep a cool head during the entire home buying process, especially during and after an inspection.
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 the decision.
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 old home.
6. Don't fail to Line Up Your Hazard Insurance
A no-brainer, right? Acquire hazard insurance as early as possible, as it’s another often-forgotten task that buyers scramble to take care of at the last minute. Lenders will ask to see an insurance binder showing you have coverage at the closing. In Florida and other coastal areas, the writing of new policies is suspended when a hurricane or major storm is approaching. It's important to obtain insurance coverage as early as possible on the new home.
In some locations, additional types of insurance coverage might be necessary (flood insurance). Talk to your lender about insurance requirements well before the closing date.
7. Don't Become Best Friends with the Seller
While it's great to be friendly, but don't get into too many long discussions with the sellers, because it could cloud your judgments. Remember, this is their home. A casual statement about "ripping up that ugly carpet" might be enough to keep the seller from negotiating with you about repairs or other issues that crop up.
8. 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. |
