MISTAKE 1: Start House Hunting Without A Pre-Approval
Imagine finding and falling in love with a house you can’t afford. Starting your search without a pre-approval* can mean wasted time and disappointment. Save time and avoid disappointment by putting first things first. Get a pre-approval letter from a qualified lender that lets you and your Realtor know exactly how much house you can afford.
MISTAKE 2: Buying A Home That’s Not Right For You
A clear understanding of what’s most important to you in a first home is critical. Call it a checklist or a wish list, but before you start your search consider these questions:
- What type of home? – Start with your basic “must haves.” This includes not just the style of the home, but also the number of floors, number of bathrooms, availability of a garage, etc.
- How much square footage? – How much space will you need? What floor plan will best suit your needs?
- What Other features? Think of these as preferences. What type of heating do you prefer? Is a gas stove essential? Do you require a finished basement? Do you prefer the laundry room be on the main floor as opposed to the basement?
- Which neighborhood? – For many people where you live is almost as important as the house you choose. What local amenities will you require? Is the location convenient to your work? If you have school age children, how are the local schools rated? What are the real estate taxes like?
*A pre-approval is not a commitment to lend. A pre-approval is subject to satisfactory appraisal, title, and no material changes to borrower’s financial condition.
MISTAKE 3: Not Using A Real Estate Agent
The importance of working with a professional realtor cannot be overstated. A good realtor understands local market conditions, can provide insights into the community such as: the quality of local schools, the convenience of nearby amenities, etc. Most importantly, a seasoned realtor can assist in the crucial negotiations leading up to and following your initial offer.
MISTAKE 4: Tampering With Your Credit Prior to Closing
Your pre-approval is based on a number of factors: income, debt, and perhaps most importantly, your credit history. Prior to closing, the lender will pull your credit report to see if there have been any changes to your financial situation. Changes to your credit report can mean additional documentation that can send your loan application back to underwriting for review. Here are a few things you shouldn’t do if you want to keep you’re closing on schedule and avoid putting your loan approval at risk.
- Don’t change jobs
- Don’t make any large purchases
- Don’t max out or open new credit card accounts
- Don’t sell off assets or move large amounts of money between accounts
Hold off on purchasing furniture or appliances for your new home. There will plenty of time to shop after your loan has closed.
