5 Tips to Keep Your Home Purchase on Track

You have found your dream home, you put an offer on it, went back and forth with negotiations with the seller, and finally agreed on a price.  Next is the due diligence phase of the home buying process and this phase is where many would-be homeowners fall apart.

To save you from going through all of that work for nothing, here are five important tips to note before you head to the closing table.

1. Follow your mortgage application

Lenders have become more diligent in verifying information on mortgage applications due to new regulations stemming from the financial and housing crisis.  As such, the mortgage process requires a seemingly endless amount of paperwork and redundancy.  Make sure to keep track of what the status of your mortgage application is like and if there are any important documents you still need to provide.

2. Wait on big ticket items

Lenders will check a buyers’ credit right before the closing to ensure their financial condition has not weakened since the buyers initial application status.  If you have opened new credit cards, significantly increased the balance on existing cards, taken out new loans, or depleted your savings, your credit score may have dropped enough to make your lender change its mind on funding your home loan.  Simply maintain a stable and consistent balance sheet and income statement until at least after the closing.

3. Keep your job

One of the most important factors a lender will look at when judging your ability to repay a loan is the amount of money you are brining in on a monthly basis.  The lender may refuse to fund your loan if you quit or change jobs before you close the purchase simply because you no longer have documented source of income. 

4. Meet contingencies

Your contract will require you to do several checklist items before the closing of the sale including performing a home inspection, depositing funds into escrow, securing home insurance, and several other items depending on the contract.  Do not wait to perform these tasks as the contract may be voidable if you do not perform within a certain time frame.

5. Hold to deadlines

The best day to close on a house is on a Wednesday in the middle of the month.  Fridays are always the busiest day of the week to close a home, and Mondays may not provide enough time to acquire all necessary documents.  Schedule your closing with enough time in advance to make sure you and all other parties involved have everything you need so as not to delay the process.

Following these five guidelines will help make sure you can close on your dream home as quickly and as smoothly as possible.