Potential Pitfalls in Your Real Estate Transaction

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Filed under: Market Comentary

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When you are buying or selling a home, the hope is that the transaction will close without any major roadblocks or problems. But, it is common for pitfalls to come up, and we have seen some crazy things over the years. What are the things that might cause problems for closing the deal? Here are a few pitfalls that you need to know about:

1. Lack of CO detectors or working fire detectors, which usually comes up with the appraisal.
2. The doggy-door between the garage and the house needs to be fire-rated. The door might need to be replaced to meet fire code.
3. Credit lines with no payments. For example, wait to buy your furniture set until after you have closed the deal.
4. Don’t open a new line of credit that needs to be explained. Inquiries can impact your credit score as well, so it is best to avoid inquiries when you are trying to buy a home. Even if the lender has already pulled your credit report for pre-approval, they will likely need to pull it again at closing time.
5. Debt consolidation or balance transfers need to be avoided. Leave your credit card balances alone while you are trying to get a loan. When it comes to debt, just do what you normally do without making big changes in your spending habits.
6. Moving the down payment money from one account to another could cause a delay in financing. Leave the money in the same place.
7. Large deposits can cause concern if they are out of your ordinary habits. These transactions will need to be verified by the lender.
8. Don’t co-sign for someone on another loan. If you co-sign on something else, your lender will need to calculate the new payment into your debt-to-income ratio.
9. Wait to buy a new car until after you are finished with the loan.
10. Stay at the same job when you are buying a home. Changing jobs or quitting your job affects your income verification and can complicate the financing.
11. Prepare the closing funds in a documented account. Create the paper trail so that it is easy to verify the source.

Do you have questions about financing for your new home? Talk to us to find the answers for your family. We are here to help you get the loan that you need to buy the home of your dreams!

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