The top 10 things you shouldn't do when you're buying a home

A home isn't closed until the keys are in your hand and the deed is recorded.  This is an excellent rule of thumb.  Unfortunately many people jump the gun not realizing there are still hurdles to get past before the home is theirs and that their actions between now and closing can create headaches, slowdowns, and even stop the transaction.

The following tips should be a guide for the prospective home-buyer.

Never make a major purchase: So you just found out your credit is A-OK, that's great but don't go buying a flashy new car to sit in your new driveway just yet.     

An increase in your debt to income ratio reduces the amount of monthly income available for your mortgage payment.  If you add on a higher car payment, the bank just might decide you cannot afford the home.

Using cash to purchase the car could also create some problems since banks consider cash reserves when approving your mortgage 

If you must make a major purchase before closing, talk to your loan officer before you do it.

Do not change jobs unless it is absolutely necessary. Lenders love to see a consistent job history.  If you do change jobs try to stay at least in the same career field.

Do NOT give an earnest money deposit directly to a for sale by owner seller. Your Good Faith Deposit should go into a trust account.  Some for sale by owner sellers don't understand that funds are not theirs to spend until closing.

I've heard many stories about sellers who spent the deposit money prior to closing.  When the transactions didn't take place for valid reason-such as financing or repair issues, the buyers had to fight for a refund.

Find an attorney or other neutral party who will hold the deposit for you until closing day and make sure your contract dictates what happens to the funds if the transaction does not close.

Do not let your emotions take over.  Keep a cool head during the entire home buying process, especially during and after a home inspection.  Be realistic.  No home is perfect, especially older homes.  It's not unusual for new owners to take care of some repairs themselves.  Don't let the seller's refusal to do a small repair kill the deal on a home you truly love.

On the other hand, don't fall so much in love with the house that you'll buy it no matter what needs to be done-unless you're sure you can handle it emotionally and financially.  Decide what type of repairs you can realistically tackle, then stick with the decision. 

Never forget to switch your utilities and discontinue services at your old home. That sounds simple, but you would be surprised how many people forget to apply for utility service at their new home.  Call the utility companies as soon as you have a contract.  Find out how many days lead time they need to switch the service, then get back with them when you have a firm closing date.

Don't forget to discontinue services at your old home.

Don't forget to line up your hazard insurance.  A no-brainer right?  But it's another often-forgotten task that buyers scramble to take care of at the last minute.  Before closing, your lender will want to see an insurance binder showing you have coverage for the new home early as possible so that closing isn't delayed.

In some locations, additional types of insurance coverage might be necessary.  Talk to your lender about insurance requirements well before the closing date.

Don't become "best friends" with the seller. I may get some flack for this one.  It's great to be friendly, but don't get into too many long discussions with the sellers, because personality conflicts often cloud judgments.

Remember, this is their home.  You're no doubt excited about moving in and if you didn't like the house you wouldn't have offered to buy it, but you'll make changes-everyone does.  A casual statement about "ripping up that ugly carpet" might be hurtful enough to keep the seller from negotiating with you about repairs or other issues that crop up.

Never panic if the appraisal comes in low.  Never panic, at least not at first.  There are some things you, and your agent, can do to correct the problem.  Go over your options with your real estate agent.

Don't go it alone. If you are working with an agent, it is the agent's duty to track many of the day to day details that involve the lender, the seller, and the seller's agent.  Be sure your agent schedules a final walkthrough just before closing.

Don't ignore lender requirements. Know what is expected of you and take care of it.  For instance, a Certificate of Eligibility is required to move forward on a VA loan.  That's something you must handle yourself.  Answer lender questions and provide required paperwork as quickly as possible-moving into your new home depends on it.

So remember, just because your preapproved, the sellers accepted your offer, the home is officially under contract and you're counting down the days to closing, nothing is a sure thing.