6 Things Buyers do to Mess Up Their Home Purchase
Having sold homes in and around Indianapolis for many years, occasionally we’ve seen buyers do something crazy that jeopardizes their chance to buy a new home, even though their agent and loan officer should have warned them in advance. So here are some reminders!
If you’re thinking about buying a new home, we hope sharing these here, will help you avoid the same pitfalls:
- Don’t, quit or change jobs during a home purchase – seriously, even if you’ve already been approved for a loan. The lender will re-verify your income and employment right before closing. Making a job change is a sure way to be declined.
- Don’t make a significant cash deposit to your bank account. Lenders verify funds along with deposits and withdrawals from your bank accounts prior to closing. Unexplained cash deposits can become a huge headache. We once had a buyer who sold a car for cash and deposited the money right before closing. Sounds like a great idea, right? I mean who couldn’t use a little extra cash? Well, it held up closing while the buyer tried to locate the new owner and get a bill of sale that would explain the deposit.
- Don’t take on new debt. It’s tempting to buy new furniture, appliances, TV’s… before you close on the new place, but don’t – especially if the purchases will be financed. And it’s definitely not the right time to buy that new motorcycle, car or boat. These purchases may throw off your debt to income ratios and cause the loan to be declined.
- Don’t skip the Home Inspection. Even if a home looks perfect, there is always the possibility that significant defects could be hidden from view. Some buyers try to save a little money by doing the inspection themselves or skipping it entirely. This is NOT the right place to scrimp. Hidden issues could cost you thousands down the road.
- Do not buy without your own agent to represent you. Not being represented by a real estate agent or being represented by the seller’s agent can be a huge mistake. Now…unless you know this real estate agent very, very well and you have the utmost confidence in him or her being able to objectively look at both sides of the transaction and gear you in the right direction having your best interest in mind, hire your own real estate agent to ensure your interests are protected!
- Do not count on a loan pre-qualification issued from a quick phone conversation with a lender to mean you’re actually approved for a loan. With just a little more time and effort and you can get a true pre-approval. That way when you find the perfect place, you aren’t hit with any surprises when making your loan application. It’s also a great idea to know what type of financing you qualify for before looking at houses. Why? Because you don’t want to fall in love with a 1920’s fixer upper that needs a ton of work and is being sold “as is” if you only qualify for an FHA loan, since the property would never qualify.