Buying your first home is a milestone that you won't soon forget. However, getting to the point where your bank says that you are clear to close can be complicated. Let's take a look at some of the issues that you should be cognizant of as you close in on purchasing your first piece of real estate.
Don't Borrow Money or Open New Credit Accounts Before Closing
Even if your offer has been accepted and the bank has accepted your mortgage application, do not borrow money or open a new account before the deal closes. This is because the mortgage underwriter will have to review any new information that could impact your ability to pay for the house. Borrowing money to furnish your home could push your DTI to unacceptable levels while opening or using a new account could lower your credit score and change the terms of your loan.
You're Still on the Hook for Current Lease Obligations
If you are leasing an apartment when you find the home you want, you still have to honor that lease. This means that you may carry both a rent payment and a mortgage payment for one or more months. Therefore, you will either need to find a way to get out of your lease or delay the close until the lease expires.
When the close occurs is something that can be negotiated with the seller, but you should be aware that your interest rate lock may expire if you wait too long. If your lease is going to expire before your lender allows you to close on the loan, you may be able to negotiate prepossession of a property, which means that you can live in the home until closing.
Do Not Skip the Inspection
Even if your offer doesn't give you the right to back out of the deal based on the results of an inspection, you should have one done anyway. This will make you aware of any issues with the home that need to be fixed when you move in. While it’s not ideal to purchase a home that has a bad roof or an old water heater, knowing about the problem ahead of time makes it easier to anticipate and fix the issue while it is still relatively minor.
Listen to Your Real Estate Agent
Whether you are looking at homes for sale in Kaysville Utah or looking for a condo in a big city like San Francisco or Chicago, the market will dictate what you can afford. Your real estate agent will be able to guide you toward homes or are within the amount that you have been approved to borrow.
Your agent will also be able to guide you toward homes in neighborhoods that you will feel most comfortable living in. While the decision of which home to purchase is ultimately up to you, listen to your agent and you will feel better about your purchase in the long run. In some cases, the real estate company that represents you will have featured listings online that you can peruse to get a better idea of what you want and need from a home.
Buying a home is nothing like buying a loaf of bread or new pair of shoes. You need to work with your agent, with your attorney and with your lender collectively to make sure that you have found a house that you feel comfortable with. While it may take days or weeks to close on the house, staying patient ensures that you get the best possible value for your money.
About the Author: Lizzie Weakley is a freelance writer from Columbus, Ohio. She went to college at The Ohio State University where she studied communications. In her free time, she enjoys the outdoors and long walks in the park with her 3-year-old husky Snowball. The information in this article is credited to Jack Fisher Homes who have homes for sale in Kaysville, Utah.