Common Mistakes during Home Buyer Process
So you’re finally ready to buy that home! Congratulations! Home buying, whether you are first time homebuyer or a seasoned expert, is an exciting yet often times stressful journey. There are a some common mistakes homebuyers can make that, if avoided, will allay much anxiety through the entire process.First and foremost, it is crucial that you start with speaking to a mortgage lender and obtaining a pre-approval letter or proof of funds from your bank. Until you know what you can afford, it is a waste of your time and your Realtor’s time to begin the exciting search for a home. The worst feeling is to discover your dream home to find out that it is not in your budget.
Be sure to speak to more than one lender. Don’t only go to your personal bank for a mortgage inquiry – shop around to learn about the different mortgage types and to find the best rates. You would be surprised at the diversity of loans that are available to people in a variety of different financial circumstances. Also, don’t make the mistake of assuming that you always need 20% down. There are loans out there that require less of a down payment, be sure to find out if you qualify for any of these.
Do not take out any new lines of credit, by way of credit cards or a new car, prior to buying a home. You want to keep your debt to income ratio status-quo before and during the entire process. Some folks think once they are approved for a loan they can run out and buy a new couch or a car; don’t do this! You can be pre-approved for a loan and still be denied last minute if something changes in your credit history.
Once you find the home of your dreams, don’t assume you have plenty of time to submit an offer. Especially in the current market, homes are going under contract sometimes on the day they go on the market, sometimes with multiple offers, with cash buyers and even with offers over the asking price. The competition is stiff. If you know you love the house, make the offer immediately! When you do submit that offer, don’t lowball. For the reasons listed above, you may very well lose it if you play games.
It’s never a good idea to drain your savings account when buying a home. Once you become a homeowner, you are now responsible for any unforeseen emergencies and repair expenses. It’s always good to have a little cushion with an emergency fund.
Lastly, talk to your mortgage lender and your Realtor openly and don’t hesitate to ask questions. This is what they’re there for and they should help keep you on track through a smooth real estate transaction.
