Don’t Sabotage your home purchase!

Smart Steps to Protect Yourself When Buying a Home

You found the house that works for you. The price makes sense, the neighborhood feels right, and the contract is finally signed.  It’s tempting to think the hard part is over.  But the period between signing the contract and sitting at the closing table is when buyers can accidentally create problems for themselves. After decades in real estate, we’ve seen a few common mistakes that can delay — or even derail — a purchase.

Choose Your Lender Carefully

Once the contract is signed, one of the first steps is completing your mortgage application. Your real estate agent will often suggest lenders they have worked with successfully over the years. That experience matters. Reliable lenders understand real estate timelines and communicate clearly with everyone involved in the transaction.

Online lenders advertising extremely low rates can look appealing, but sometimes those rates come with slow processing, limited communication, or unexpected fees. When a lender struggles to perform, it can delay your closing — or in some cases jeopardize the deal entirely.

Respond Quickly to Your Lender

Mortgage underwriting requires documentation, and quite a bit of it.  You may be asked to provide tax returns, bank statements, pay stubs, and explanations for certain deposits. The easiest way to handle this is to keep all of your documents organized electronically so they can be sent quickly when requested.

One thing that surprises many buyers is that the same documents may be requested more than once. Your loan file passes through multiple departments during processing, and requests can repeat themselves. When that happens, simply resend the information so the process can keep moving forward.

Protect Your Credit Until Closing

This is one of the most important rules buyers should follow.  While your loan is being processed, lenders want your financial picture to remain stable. That means no major financial changes until after closing.

Avoid:  Buying a car, Financing furniture or appliances, Opening or closing credit cards, Draining savings accounts, Missing or making late payments on existing bills.

Even smaller purchases can add up if they increase your debt-to-income ratio.  Many buyers don’t realize this, but lenders check your credit again just before closing. A sudden drop in your credit score or an increase in your debt could delay or even cancel  your mortgage approval.

Consider Purchasing Owner’s Title Insurance

When you buy a home, the lender will require a title insurance policy that protects the bank’s loan. However, that policy does not protect the buyer.  An owner’s title insurance policy protects your ownership rights if an issue with the title surfaces after closing. This could include undiscovered liens, errors in public records, or even ownership disputes that were not uncovered during the title search.

Because a home purchase is one of the largest investments most people will make, purchasing an owner’s title policy is often considered a smart investment. It is a one-time cost at closing that protects you for as long as you own the property.

Get a Survey

If you are purchasing a single-family home, obtaining a property survey is also a wise step. For a property with a yard under half an acre, a survey typically costs between $600 and $800. While some buyers see this as an easy place to save money, it can actually prevent costly problems later.

A survey provides a detailed map of the property showing:  Property lines, the location of the home, fences, sheds, pools, and other permanent structures, the building envelope and setback distances.  In new construction communities, builders typically provide a survey and include the cost in your closing expenses.

Why does this matter?  Sometimes a fence, shed, or other structure may partially encroach onto a neighboring property. If that issue is discovered before closing, it is the seller’s responsibility to correct it. Once you own the property, however, resolving that issue becomes your responsibility.

Keep Your Eye on the Finish Line

Buying a home is exciting, and it’s natural to start thinking about paint colors, furniture placement, and housewarming parties.  But the transaction isn’t finished until the keys are in your hands.  Keeping your finances stable, responding quickly to your lender, and taking a few extra steps to protect yourself can make the difference between a smooth closing and an unexpected problem.

A little preparation now helps ensure that when closing day arrives, you can focus on the best part — getting the keys to your new home.

Final Thought

Buying a home is one of the biggest financial decisions most people will make. Understanding the process and avoiding a few common pitfalls can make the experience far smoother.

If you’re thinking about buying a home in Coastal Delaware or relocating to the area, understanding how the process works here is essential. Our focus is on education and guiding  buyers through every step of the journey, always with your best interests at heart. In an ever-changing real estate market, having experienced professionals by your side makes a significant difference.

We’re Nancy and Katie — the mother-daughter duo behind Selling SoDel — helping buyers navigate the Coastal Delaware real estate market every day.