Things You Shouldn't Do When You're Buying a Home
1. Don't Make a
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
Using cash to
purchase the car could also create a problem, since banks consider
cash reserves when approving your mortgage. If you make a major
purchase before closing, talk to your loan officer before you do it.
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.
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.
incidents 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.
Don't Let Your
Emotions Take Over
Keep a cool head
during the entire home buying process, especially during and after
an 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 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.
Suvadip Das is a
research fellow in management and at the same time a web developer.
Web design is his passion. He has worked for Freelance Writer
Organization and various websites including
His credentials include writing keyword enriched articles and
features on various issues including
residential mortgage loans,
home equity lines of credit and