Mistakes to Avoid While Closing on a New Home

Mistakes to Avoid While Closing on a New Home
Mistakes to Avoid While Closing on a New Home

Congratulations! You’ve finally found the perfect house, and after weeks or even months of negotiations and paperwork, you’re almost ready to close on your new home. It’s an exciting and stressful time, but it’s critical to stay focused and avoid some common mistakes that could delay or even derail your closing. Here are six common mistakes some homebuyers make when closing on a new home and give you tips to make sure your closing goes smoothly.

Mistake #1: Not reviewing the closing disclosure carefully

After you apply for a mortgage, you’ll receive a closing disclosure that outlines the key details of your loan, including the loan term, interest rate, monthly payments, closing costs, and escrow. Reviewing this document closely is crucial to ensure that everything is correct. Any discrepancies or errors can throw off your budget or delay the closing process. Take the time to go through the closing disclosure line by line with your agent or lender. Don’t hesitate to ask for clarification if you have any questions.

Mistake #2: Making big financial moves before closing

Before closing on a new home, it’s crucial to ensure that your credit score remains intact. Taking out loans, opening new credit card accounts, cosigning other loans, or making large purchases can alter your credit score, potentially jeopardizing your ability to secure a loan or obtain a favorable interest rate. Likewise, wait until after closing to pay off loans or close lines of credits. While this normally is a positive thing, the combination of a reduction in credit and savings can be a red flag for loan underwriters. It’s best to avoid making any significant financial moves until the closing process is complete.

Mistake #3: Quitting or switching jobs

Another mistake some homebuyers make while closing on a new home is changing jobs. Lenders equate longer terms of employment with financial stability; the longer you’re there the better. Changing jobs can delay your closing so it’s best to stay put until after you’ve received your keys.

Mistake #4: Not having all necessary documents handy

At the closing, you’ll need to sign several documents. It’s important to have all the necessary documents, including your ID and proof of insurance, ready and available. Check with your agent or lender to confirm the complete list of required documents and have them organized for an efficient and smooth signing process.

Mistake #5: Forgetting to line up your payment

Many people are surprised to learn they can’t use a personal check to cover the down payment and closing costs. You’ll need line up a wire transfer or cashier’s check to settle the balance. If you opt for a cashier’s check, make sure you request one from your bank in advance; some banks may require advance notice. With either a wire transfer or cashier’s check, make sure the funds are available in the account before your closing appointment.

Mistake #6: Not conducting a final walkthrough

Before closing on a new home, it’s essential to conduct a final walkthrough to ensure that everything is in good condition and meets the agreed-upon terms of the contract. Check that all repairs have been made, appliances are in working order, and everything else is in the condition you expected. If you find any issues, discuss them with the builder or seller and agent before closing.

Closing on a new home is an exciting and often nerve-wracking experience. But avoiding the common mistakes discussed in this post can help ensure a smoother closing process. Take your time, review every document carefully, and don’t hesitate to ask your lender or attorney for clarification on anything you don’t understand so you can close on your new home with confidence and peace of mind.

If this is the year you buy a new home, we hope you’ll consider Williams Homes. We build new home communities throughout Northern and Southern California, Idaho, Montana, and Texas in desirable areas you’ll love to live. Learn more about our available quick move-in homes and new home communities at WilliamsHomes.com.