So you’re seriously considering buying a home?
That’s great! During this process, you will hear all kinds of information from family or friends that may be outdated and untrue. We are human, everyone makes mistakes but when it comes to home buying, you do not want it to cost you.
Don’t let the mistakes you make cost you the house of your dreams or weigh down your precious pockets.
Make sure you are in-the-know if you’re stepping into home ownership.
Not Maintaining Healthy Credit Practices
Your credit score is very important when looking for a home loan. It clearly determines your worthiness for paying back the loan over time. The higher your credit score, the better rate and the lower your cost over the life of the loan. At Mortgage Biz, we are able to price a loan with a credit score of 580 or more. To maintain healthy credit, keep your credit utilization low, pay your bills on time, and maintain long-standing accounts. You can check your credit report yearly through the government to ensure there is nothing weird on your report that doesn’t belong.
Searching for homes without getting pre-approved
Don’t you want to know what you can afford before you go shopping for something? It’s the same when looking to purchase a home. Don’t get your hopes up for a dream house while blinded by the state of your financial situation. A pre-approval does a few things: (1) Allows a mortgage professional to analyze your credit, income, and assets (2) Provides a price range you can start shopping in. (3) Gives your realtor more confidence in your ability to afford the properties they are taking the time to show you. (4) Makes a difference in a competitive market. Explore today, apply here with no obligation.
Not keeping paper trails for gift funds
Sometimes we have gracious friends and family members who want to gift us money to purchase a home. Make sure you plan for this early. Do not consider this at the last minute, it will become a headache if you are not proactive.
Understand upfront how they will provide the gift and if they will be able to document the trail of the money leaving their account and entering yours.
Not putting enough or too much down
Deciding on what your down payment should depend on what you can afford when you’re ready to purchase. You do not need to wait until you save 20% of the cost for your dream home and sometimes if you plan to put down that much, you could end up cash poor. A rainy day fund is needed to take care of any necessary repairs in the home.
There are programs out whereas little at 3% down is required.
Each loan program has their set of advantages and disadvantages, which we can discuss in a chart in another blog post.
Falling too in love with one house
Buying a home is exciting! And we all have our ideal home in mind. But do not take it personally if you see that ONE home that you love and it doesn’t become yours. If you live in a competitive market, it is most likely that there are other bids in the pile with yours.
Don’t get caught up by trying to outbid others through offering to pay thousands more over the asking price. This can set you up for costly mistakes.
Some of the risks include: (1) Skirting on the edge of your budget (2) Can lose money on the purchase (3) The appraisal doesn’t come in near the offer price.
Making the effort to avoid these mistakes is the beginning. There are many parts at play during a transaction. And in real estate, they impact each other. Even slip-ups that may seem small to the everyday consumer, can change a transaction in an instant. Remember to be clear on:
- Your financial situation
- finding the right lender for you, who answers your questions in a timely manner
- and get pre-approved before you start shopping. Start on solid ground to lead you to success!
If you have questions about how we can help you avoid some of these mistakes, reach out to our team at Mortgage Biz of Florida – 561-420-0001.