5 Mistakes to Avoid During the Home Buying Process
Buying a home has so many steps that it’s easy to get caught up in the big steps and forget those small things that make the process come together smoothly. We’ve compiled a small list of mistakes to avoid making when you are in the process of buying a home.
- Not Getting Preapproved
We talk about preapproval all the time but why is it important in the home buying process? There are a few reasons you’ll want to be preapproved. First, this will give you a realistic expectation on what you can afford. If you look for houses first, you risk falling in love with one out of your price range which leaves you buying a house you cannot afford or never finding one that compares to it that is in the range your finances allow. Next, being preapproved could give you a leg up on other buyers. If you put in an offer with a preapproval, you are already showing that you took the time to put in effort before buying and the process will not be held up with the struggle to get approved. However, not getting preapproved could put you in the position to miss out on a home you want if there is another buyer who is preapproved.
- Avoid New Credit
If you are in the process of buying a home, you want to keep your credit score and debt-to-income ratio in good shape. Applying for new lines of credit before closing on a house is a no-go for a few reasons. First, it can impact your credit score by adding a hard inquiry. Next, it can lower your average credit age. Spending on a credit card will also add to your utilization rate which is important to keep low. Avoiding new credit until after you close will keep your loan from being denied—lenders often check credit scores more than once so waiting until after closing is the best way to keep yourself ahead of the game.
- Not Doing Your Research
This especially goes for first time homebuyers, research programs for home buyers. This can be under first time home buyer grants, specific loan types or ways to get lower interest rates. Having an idea of what programs exist and what you could qualify for leave you in a great spot for saving a ton of money or getting approved for something if you aren’t in an ideal situation.
- Buying Based on Cosmetic Appearance
You may love the look of a home but it could be hiding structural issues that may cost you quite a bit in the future or cause the home to fail an inspection. Buying based on the appearance alone brings a handful of issues with it. For example, if you find a home that has beautiful fixtures and a great paint job but doesn’t have the amount of space you want, you will find yourself wanting to leave it sooner than intended. But if you look at a home that is everything you want, just sporting bad landscaping and a shabby paintjob, those changes can be fixed for a decent price and the home can be exactly what you were looking for.
- Forgetting to Factor in Additional Costs
You know that home buying comes with down payments, closings costs and fees associated with the mortgage but forgetting about the other costs that come with buying a home can be a big mistake. You’ll need to be able to cover the cost of moving. Whether that includes a crew, a truck, packaging, travel or just supplying yourself with light bulbs, you don’t want to drain your savings or take from your down payment to make up for this loss.
By keeping these five things in mind, hopefully the process of buying a home is a fairly relaxed process for you. Our loan officers are happy to help you with preapprovals and getting familiar with loan types and home buying programs. Contact us to get started on your future mortgage approval.
