Common Mistakes During the Closing Process That Derail a New Home Purchase

 Posted on May 17, 2023 in Real Estate

Few life events are as exciting as purchasing a new home. Whether this will be your first time as a homeowner, or you are upgrading to a new residence, staying grounded is crucial. Mistakes and oversights during the home-buying process can lead to nasty surprises during closing.

Celebrating Your New Home with Expensive Purchases Before Closing

One of the first things people want to do once they have purchased a new home is buy appliances, decorations, or other items for the home. While this is certainly understandable, making large purchases before the deal is closed can result in heartbreak. Large purchases affect your debt profile, increasing the risk of being denied your mortgage loan. You may have been approved for a mortgage before the purchases, but now that circumstances have changed, the lender could back out.

Opening a new line of credit before the purchases are finalized can have the same devastating impact on your ability to secure a mortgage and acquire the home you have your eyes set on. It is best to wait until closing is complete before opening any new lines of credit or making any large purchases.

Typos or Mistakes in Closing Paperwork

Something as minor as a misspelled name or incorrect address number can delay the closing of your home for days or weeks. It is important to carefully review all of the paperwork well in advance of the closing date. Review your Closing Disclosure for any inaccurate information, typos, or vague language. Also, look through your loan estimate and double-check the loan and down payment amounts, interest rates, and all other information. You do not want to find out about a problem for the first time on your closing date.

Title Issues That Were Not Previously Discovered

Legal judgments, liens, or bankruptcies prevent a seller from transferring a clear title to the buyer. The importance of ensuring a problem-free title before closing cannot be overstated. After the title company completes a preliminary title report, get a copy and read it carefully. If there are any problems, such as a mechanics lien or a lawsuit, you will need to get these cleared up before you can buy the house. Title insurance protects you in case the title company fails to discover any problems, but this insurance goes into effect on the day of closing. If problems occur before closing, you may be unable to complete the sale.

Contact our Bexar County Real Estate Attorney

San Antonio real estate attorney Geoff Mayfield provides dependable legal support and assistance to homebuyers and sellers. Call Geoff Mayfield, Attorney at Law at 210-535-0870 to set up your confidential consultation today.

Source:

https://www.businessinsider.com/personal-finance/closing-house-common-mistakes-2022-2