Common First-Time Homebuyer Closing Mistakes
Common First-Time Homebuyer Closing Mistakes
Finding the right house and closing on it, in addition to conducting a title search and purchasing the right title insurance policy for the property, usually takes a few months or more. The home buying process is complex; you need all the help you can get, as it is astonishingly easy to make big mistakes during closing that can cost you a lot of money and time.
The following is a list of 4 common mistakes first-time homebuyers make during closing:
1 – Failing to Answer Questions from Your Lender, Realtor and Title Company
In the final stages of the home buying process, no one is more important than your realtor, your lender, and the title insurance company you hired to handle your closing, which is why it is crucial to be responsive by replying to emails, answering/returning calls, and being easy to work with. After all, these people have the knowledge and the skills to give you a home that comes without hidden issues, which can give you headaches in the future.
2 – Changing Your Bank Account
If you are closing on a new home, now is definitely not the time to close your bank account or open a new one. This is especially crucial if you are planning to open a new line of credit. As a homebuyer, you need to have your finances in order before even thinking about applying for a mortgage loan.
If you need to close/open accounts or transfer large sums of money between different accounts, make sure you do it before the closing process begins. This does not mean that you do not have every right to use your bank’s account services – you do. However, for the sake of being thorough, you should make sure to ask your lender, banker, and/or realtor about any potential ramifications.
3 – Making Big Purchases before Closing on a Mortgage Loan
Buying a house will likely be the biggest purchase you will ever make, and it will be hundreds of thousands of dollars. Obviously, most people do not have that amount of cash and, therefore, need to finance their home via a mortgage loan. The average down payment on a house is usually around 13% of the total purchase price. Because you will be financing the rest of that cost, lenders will extensively review your credit score even after your mortgage loan has been approved.They will re-check your credit right before the date of your closing and before you receive the funds from them.
When it comes to getting a mortgage loan, your credit score is the blood in your veins and the air in your lungs. This means that it is absolutely crucial not to make any “big” purchases during closing, such as a boat, a car, expensive appliances, furniture, etc. Maintaining a good credit score is crucial.
4 – Switching Jobs
Suddenly switching jobs while you are closing on a new house can be a big red flag for lenders, as they want proof that you will be able to pay them back, and the best way to prove that you will is by to have a stable income history.
If you have been planning to transition jobs for a while or have received an offer for a better position at a different company, you should wait until the closing process is complete before embarking on any new employment opportunities – so long as you are able to, of course. However, some lenders have no problem with mortgage applicants switching jobs if the new job pays better or if the applicant has a history of low debt. Depending on the lender, there might be some flexibility in this area.
Work with Marina Title for a Smooth Closing Experience
Having a clear title on your new home is an essential part of a smooth, engaging, and headache-free closing experience. The team of title professionals at Marina Title can help ensure your new home remains in your hands for as long as you choose to own it — the way owning a home should always be.
To get in touch with Marina Title, call us today at (305) 901-5628 or send us an email to [email protected] to schedule an initial consultation with one of our title professionals.
