It is easy to make some really huge home buying mistakes that are not easily fixed before closing. Sometimes these mistakes can haunt you for several years or even ruin your dreams of home ownership before the deal is closed.
Not Confiding in Your Financial Advisor
Your advisor could be your real-estate attorney or your real estate agent. Buyers will withhold vital information for a variety of reasons from worrying about how they will be perceived to thinking they have all the answers to simply not trusting their financial advisor.
Real estate professionals handle so many different types of transactions and personalities, that it is likely they have already heard everything. You will not surprise them with any of your problems or concerns. Your advisors are representing your best interest and they cannot do that if you don't tell them everything they need to know. Also, your advisor has more experience with dealing with problems and will have much better answers than you can ever come up with on your own.
If you are feeling scared or feel you have to back out of the deal, tell your advisor your concerns and listen to their advice. A professional can help you determine if you really do need to back out of a deal and may even be able to help you get your earnest money back, which is that portion of the down payment that accompanies a purchase agreement.
Altering Your Financial Status Prior to Closing
Once you are qualified for a loan, do not make any major purchases. Do not buy a car, washer and dryer, refrigerator, lawn mower or garden equipment, expensive electronics or computers, or furniture for the new house. Slight alterations in your financial picture could change your credit ratios enough that an underwriter will throw out your loan.
If your loan contingency has expired or been removed, there is a possibility that you could even lose your earnest money as well as losing the home.
Wait until the closing is completed before you make any major purchases. The temptation to buy new appliances or new furniture will have to be put on hold for a few days or weeks. Once the deal goes through, then go shopping.
Buying the Wrong House
If you are a first time home buyer, then make a list of priorities you must have for your new home. Figure out what are the deal breakers and what you can live without. The deal breakers are things you refuse to compromise on. This list may include the number of bedrooms, a garage, large back yard or water-front property. Things-you-can-live-without is a list of things you would like to have, but if they aren't included in your new home, you will not be terribly upset. For example, you would like to live in a cul-de-sac, have a tree large enough for a swing in your yard, or have French doors leading out to the patio, but if the house you find doesn't have one or more of these, you will still be happy living there.
Stick to this list.
Do not get caught up in the emotion of home buying and agree to purchase a home that is more than you can afford. Do not settle for something less than you want because of other factors, like a nice neighborhood or nice floor plan.
If you need two bathrooms, do not settle for one because you will be very unhappy in a very short period of time. Never agree to pay more than 10% over your original financial plan just because the larger house appeals to your emotions. You may run the risk of losing your home in a few months if your mortgage payments are too high.