Since the financial crisis of 2008, lenders have become much more strict in their lending practices. New TRID rules have meant longer escrow times. Buyers get antsy. They do things that they think are innocuous while in escrow. However, they can be detrimental to your home loan in the end. Here are some common Buyer mistakes that you can easily avoid.
Common Buyer Mistakes
Making Major Purchases – One of the biggest common Buyer mistakes is to make big purchases while you are still in the middle of your escrow. It’s easy to get excited and start designing your ideal kitchen or perfect living room before you’ve actually moved in. You may decide to get a jump on things and go furniture shopping now. That way, you can get rid of your old things and move in with fresh, new “stuff”. Bad idea. Many lenders will take another look at your credit score before the final paperwork is drawn up. New purchases that drive up the balance on your credit cards can lower your credit score and raise alarms to a lender.
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Lying on Your Application – Another one of the common Buyer mistakes made happens on your loan application. You may think that nudging your income up a little or leaving off information about certain debts won’t do anyone any harm. Lenders have become very thorough in their due diligence on mortgage loans. Besides, it is actually a crime to lie about anything on your loan application. You could face a fine and/or jail time.
Changing Jobs – You’ve been at your job for several years now. Lenders like to see that. However, you’re interested in exploring other opportunities. Hold off on changing jobs until after your escrow closes. A job change is an uncertainty that lenders are not keen on supporting. Your loan could get dropped.
Ignoring Contingencies or Deadlines – Contingencies and deadlines are sacrosanct in a real estate transaction. These are not to be trifled with. Whatever you are supposed to get done before the finalization of the sale needs to be done, whether that is putting financing in place or getting a home inspection done by a certain date. Start early in case there are any obstacles along the way. These are just a few of the more common Buyer mistakes that can be made before a sale is finalized. They are also avoidable. Remember, your new home is not actually yours until you sign the final paperwork and are handed your keys. Anything you do before then can affect whether or not you actually get to move in.
Scott Gleason, CRS at Coldwell Banker Realty – East, NJ Luxury Homes