Buying a home in Tennessee is an exciting experience but can also be overwhelming. Closing is the final stage of the transaction where the buyer and seller sign all the necessary documents to transfer ownership of the property. However, before you reach that stage, there are several things you should avoid doing.
Don’t make any large purchases
One of the biggest mistakes buyers make is making a large purchase before closing. This could include buying a new car, furniture or appliances. Doing so could impact your credit score, debt-to-income ratio and ultimately your ability to secure financing.
Lenders will pull your credit report and verify your employment and income information right before closing, so any changes to your financial situation could delay or even cancel the closing altogether.
Don’t switch jobs
If possible, try not to switch jobs before closing on your new home. When evaluating your loan application, lenders look for a steady employment history and income. A new job could raise red flags and cause the lender to delay the closing until they verify your income and employment.
Don’t open or close credit accounts
Opening or closing credit accounts can impact your credit score and debt-to-income ratio. This, in turn, can affect your ability to get approved for a mortgage or the loan terms. It’s best to hold off on any changes to your credit until after the closing.
Don’t make large deposits
Large deposits to your bank account before closing can also cause problems. Lenders need to verify the source of any large deposits to ensure that it’s not a loan that needs to be paid back. If you receive a large sum of money, talk to your lender about how to document it properly to avoid delays in the closing process.
Don’t forget to do a final walkthrough
Before real estate closings, it’s essential to do a final walkthrough of the property to ensure that everything is in the condition you agreed upon. This is your last chance to ensure that any repairs or changes have been made. Skipping the final walkthrough could result in costly repairs or disputes with the seller.
Don’t forget to read and understand all the documents
Closing involves signing many legal documents, including the mortgage note, deed of trust and settlement statement. Make sure to read and understand each document thoroughly before signing. If you don’t understand something, ask your real estate agent to explain it.
Avoiding costly mistakes
Closing on a home involves many moving parts, and there are several things to remember. Avoiding pitfalls can help ensure the closing goes smoothly and you’re not met with surprises at the last minute. Remember to communicate with your real estate agent and lender throughout the process and ask questions if anything is unclear.