Murphy’s Law says “anything that can go wrong, will go wrong” and when you are buying a home, there are a lot of moving parts that can go wrong. Things can change in the blink of an eye so before you throw your hands up in the air and give up, there are some things you can do to fix the situation. Read on to find out what could potentially go wrong during closing and what you can do to fix them.
Your Income to Debt Ratio Has Changed
You have gone through all of the required steps to get a mortgage. But suddenly your lender calls you in the middle of searching for a home and says you are no longer qualified because your monthly income to monthly debt ratio has changed. While most people why this is an important thing, you may not know why your income to debt ratio should not be touched while applying for a mortgage. This ratio goes up any time you borrow money and it drops when you pay off a loan. While it can be tempting to open up a store credit card, it is important not to add or subtract anything from your bank account without talking to your lender first. If you do change your debt to income ratio in any way, one of two things can happen: your loan could fall through or your rates will go up. A higher rate means you will be paying more, which could further mess up your ratio. Make sure when buying a home, you keep your debt to income ratio even.
Denied Homeowner’s Insurance Coverage
Homeowners’ insurance is an important part of buying a home. You will need this insurance in order to close on a home. But just because you got approved for a mortgage doesn’t mean you will get approved for coverage. Before you panic about being denied coverage, remember there are plenty more homeowners’ insurance agencies out there. Apply to more than one company to be on the safe side and talking to a few agents could get you a better rate.
Appraisals Came Back Too Low
Appraisals are based on a carefully done calculation based on things like features in the home, the neighborhood, and recent sales of comparable homes. But if your appraisal value comes back way below price, it could cause you to pause. A low appraisal can kill the deal if you and the seller can’t agree on the price the house is worth. But with an experiences realtor on your side, you could walk away with a home at a reduced price.
Be sure to click back for part 2 of this series for more information! Just because there are some problems when buying a home doesn’t mean the deal has to end. Let us help guide you through the closing process. For more information on buying a home, call Simply Referable today.
Avoiding the Closing Nightmares with Simply Referable
There are any number of obscure and strange real estate laws in Maryland. The small team of realtors at Simply Referable will be happy to help guide you through the thicket. Each of our team members has an area of expertise, and we strive to form lasting bonds with each of our clients. We want to be your go-to realtors every time you or a friend wants to make a change. With local experience, our realtors can help you choose a house that is just the right fit for your family, now and forever. Contact us online or give us a call at 410-983-9045.