If this is the first time you’re buying a home, there are some things you’ll need to know to help you avoid mistakes during the residential escrow process. Buying real estate takes time and know-how. Keep reading for some quick tips from a Bay Area escrow agent.
Are you ready to learn more about the most common mistakes would-be homeowners find themselves in and how to stay on track? Let’s get started!
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Don’t Finance Big Purchases After Pre-Approval
One of the most detrimental mistakes you can make during this time is to rack up a big financial debt before the house is officially yours. This shift in your income to debt ratio could negatively impact your credit score, and, as a result, the pre-approval for your home loan. Don’t forget that pre-approval for a home mortgage isn’t a guarantee.
Underwriting is the process of deciding whether or not you can afford to take on a mortgage payment at this time. The lender will take a close look at your finances before making a final decision. After all, they’re taking a financial risk if they offer you a loan. The bottom line is that this is probably not an ideal time to finance a brand new vehicle or put a luxury trip to Europe on your credit card.
Definitely Don’t Quit Your Job
It should go without saying that this is also not the time to quit a stable job to try your hand at becoming an entrepreneur. Making any kind of career change in the middle of buying a home won’t look good to a lender who is counting on you to have a stable source of income. Remember, your financial life is going to be scrutinized in detail because a lender is trying to decide if they should take a chance on your loan.
Stick to the Timeline
If you’re buying real estate there are a lot of hoops to jump through, like setting up a residential escrow account. There should be a clear outline to follow to keep the transaction moving forward from one step to the next. Be sure to pay close attention to any pertinent deadlines The terms of your agreement should be clearly spelled out in the purchase agreement. This helps everyone to stay on the same page.
Stick to these set deadlines to ensure that you don’t find yourself in breach of contract. Failing to do so could actually result in a nullification of the purchase agreement. You could even lose out on your earnest money deposit, which would be frustrating and a real waste.
Residential Escrow Services
If you need an experienced firm to conduct escrow agreements, contact us at Bay Area Escrow. We have extensive experience in providing residential escrow to real estate buyers and sellers in the Bay Area. If you need a third party to mediate your property transactions, don’t hesitate to reach out to us at (925) 831-9099. We look forward to working with you.