Are you in the process of purchasing your first home? You’ve hired a realtor, found the perfect property, and made an offer that was accepted. You’re well on your way to owning the house of your dreams, but before you can start moving in, you’ll need to get through the closing process. Below are three mistakes to avoid during your real estate closing.
1. Not Paying Your Bills
Before approving your mortgage application, your bank needs to determine whether you’re a safe investment. In other words, can they be confident that you’re going to pay back the loan? To make this decision, your lender will likely examine how much money you make, your employment history, the amount of money you’ve saved and invested, and how much debt you owe. They’ll also check your credit score to see whether you have a history of paying your bills on time.
The homebuying process can be very stressful, and with everything going on in your life right now, it’s easy to miss due dates and get behind on your bills. But it’s important that you keep up with your payments, since missed deadlines could raise your interest rate or entirely prevent you from closing on your new home. If you have the option, you may want to consider switching your bills to autopay to ensure they’re paid on time, at least until the closing process is over.
2. Opening Up a New Line of Credit
Once you found your dream home, you probably started imagining how you want to decorate it. Paint, furniture, and other décor items can quickly add up, so you might have considered proactively applying for a new credit card to ensure you have the means to start making purchases as soon as the closing goes through.
Don’t do that. Opening up a new line of credit can temporarily lower your credit score and make you look like a riskier borrower, so you should hold off on applying for new credit cards until after your closing is completed. You should also avoid making large purchases and requesting credit limit increases on your existing credit cards.
3. Not Hiring an Attorney to Assist With Your Closing
Certain states—such as New York—require attorneys to be present at real estate closings. Florida isn’t one of those states. In Florida, homebuyers can choose whether to hire an attorney or a title company to help with their closing, but having an attorney involved offers many advantages. In addition to holding escrow, issuing title insurance, and drafting mortgages, deeds, and releases—the only services that title companies can perform—attorneys can also provide legal advice, represent clients in negotiations, and prepare supplemental legal documents. Plus, title insurance rates are set by statute in Florida, and attorneys usually charge about the same amount as title companies for settlement and closing fees.
The Lyons Law Group, P.A., is pleased to offer real estate closing services for clients purchasing homes in Pasco County, Hernando County, and other areas of Tampa Bay. Contact us today to schedule a free initial consultation—we have offices in New Port Richey and Spring Hill.