With the right insight, understanding what not to do when buying a house comes naturally. After all, buying a home is one of life’s largest financial decisions. Making research an utmost priority is vital. Considering the benefits of homeownership, having peace of mind each step of the way is invaluable. After all, sound decisions at the beginning of the home-buying process lay the groundwork for confidence in the future. Coupling that, a well-maintained property accrues value, providing instant liquidity at the point of sale or refinancing. The footwork of setting a home-buying plan in place is well worth the effort. Let’s discover what not to do when buying a house.
What not to do when buying a house: Don’t rush the process.
Don’t Waste Time; Hire a Lender First.
Hire a lender before the house hunt begins. Researching lenders is the first step in buying a home. Avoid hunting for properties without pre-approval, and research lenders.
When buyers understand budgeting and affordability, prematurely shopping neighborhoods simply waste time. In alignment with this, buyers often become enchanted with unrealistic properties. The rules of lending work to benefit borrowers in the long run. For that reason, mortgage loans come in all shapes and sizes. Although the process is arduous, underwriting ensures buyers are ready. Experienced lenders ultimately determine whether the home purchase suits each borrower’s financial picture.
Finding a trusted lender who fits and is easy to communicate with is imperative. The key to finding the best mortgage is partnering with an industry authority. Any lending expert expects buyers to research them. Effective communication starts with transparency, honesty, and willingness to listen.
Don’t DIY it; Hire a Real Estate Professional.
Hire a qualified real estate agent who listens and knows the market. Atop the list of what not to do when buying a home, visiting new homes/properties without representation is a biggie. As tempting as it may seem to save a buck, this pitfall can have very expensive repercussions. Realtors understand the market and know precisely what to look out for. Along those lines, a well-connected agent is invaluable. Their contact list is often top-tier, and accessing the best industry pros is invaluable. Unequivocally, real estate agents and experienced mortgage lender selection are the top 2 priorities when buying a home.
Don’t Swing for the Fences; Be Realistic
Stay within budget. Resist the urge to look at properties above pre-approval numbers.
Of course, we all want more than we can afford, particularly when we are looking at gorgeous homes. However, searching with unrealistic expectations generally makes the entire process disappointing. In alignment with this, avoid looking at homes at the very top of the budget.
Remember that those mortgage payments aren’t going to come with flexibility. Beyond that, typically, homes require improvements. As anticipated, beyond loan approvals, and escrow close, moving is expensive. Lastly, avoid buying a home above its market value. Sure, in some situations, overspending is unavoidable. However, paying too much is definitely #3 on the list of what not to do when buying a house list.
Don’t Succumb to Pressure; If it Feels off, Walk Away.
Don’t be afraid to walk away. On one hand, hiring aggressive, confident professionals is an advantage. Conversely, being pressured into purchasing a property or loan ultimately results in buyer’s remorse. Steer clear of overly pushy agents and lenders, and immediately stop the process if the situation involves a regretful partnership. Buyers can always circle back. However, there isn’t an undo button once the final approval is done and the keys are in hand.
Don’t Rush the Process; Buying a Home Takes Time.
Keep an open mind. Excitingly, the home search is on! Certainly, home prices dictate the search criteria, and great neighborhoods within the price range are hard to find. However, avoid falling in love with the first home. Resist the urge to imagine a complete lifetime before visiting multiple properties. With open-minded thinking, there are multiple dream homes out there. Informed through experience, real estate professionals are a wealth of information, be sure to consider their opinion.
Don’t Settle; Location Matters.
The golden rule of real estate; is location, location, location.
Hearing how much house a realtor can get just 20 miles out of town is enticing. However, buying a house that is too rural or urban for a buyer’s lifestyle is consequential. Sometimes people love to be in the heart of the city, and for others, those USDA loans and wide open spaces are ideal. Allowing the housing market to dictate location is a pitfall. Additionally, watch local market indicators for change. What’s being built around you? The addition of a new subdivision or major hub affects property values. Be sure and check property taxes before ultimately deciding on a property.
Don’t Assume; Not All Loans Are Require 20% Down
Don’t delay looking for property based on down payment savings.
An experienced lender can approve loan applications and finance a property with much less upfront cost than the typical assumption of needing 20% down. In some instances (like VA loans), lenders have loan programs (like FHA loans) that only require 3%, especially for first-time home buyers.
First-time buyers have countless opportunities, and an experienced lender can help find a loan that suits each buyer. Don’t forget to ask about down payment assistance (DPA) programs. Down payment amounts, credit scores, and debt-to-income ratios dictate most loan approval processes. Expert lenders walk clients through various scenarios regarding private mortgage insurance and mortgage insurance premiums (PMI & MIP).
What Not to Do When Buying a House: Ignoring the Financial Impact of Debt
Don’t Miss Payments; Steady Finances Payoff
Keep an eye on credit scores.
A surefire way to be declined for a loan is with bad credit. Underwriters look for common mistakes like missing loan payments, reports with credit cards max out, and recent large financed purchases are big red flags. Keeping those payments steady and prompt is music to a lender’s ears. Since mortgage approval depends on financial stability, any gaps show irresponsibility. When possible, spread debts evenly; this will look seamless and prove a steady credit history.
Don’t Skip Credit Monitoring; Avoid Credit Inquiries
What Not to Do When Buying a House: Take on Debt or Run a Credit Check
Dreaming about a home with new furniture and upgrades is fun. At every turn, offers for discounts and savings are abundant, often alongside a hard hit on the buyer’s credit report. In the homebuying case, borrowers risk lowering their credit scores. To that end, when borrowers are mid-loan process, buying a new car, any new line of credit, refinancing anything, or acquiring any new debt lowers debt-to-income ratios and is a sign of financial instability. Today, fraud is prevalent in any financial transaction, and home buying is no different. Given this fact, only give out financial information to verified sources, especially online.
Don’t Quit Your Day Job; Employment Timelines Matter
Slow and Steady Gets Loan Approval. Don’t Change Jobs.
Change is constant, and we aren’t always in the driver’s seat. In certain situations, the decision to change jobs may not be avoidable. We understand that life happens. However, by delaying the changes until after loan approvals occur, loan approvals are streamlined. Since personal finances prove a borrower’s loan payoff ability, steady employment history, and financial responsibility are at the top of the list.
Don’t Win the Lottery; Clean Banking Records Prove Reliability
Hold steady with your bank account.
Occasionally, generous friends and family help buyers invest in homeownership. Financially speaking, these lucky buyers have two options. First, lenders help borrowers properly shift funds when generous monetary gifting occurs. Second, any sizeable financial transactions, like changing banks or adding large sums of money to bank accounts, look shady and can complicate paperwork. Naturally, banking institutions want to see steady financial deposits and withdrawals. Coupled with funds in savings for closing costs and down payments.
What Not to Do When Buying a House From Property Selection to Closing.
Don’t skip the home inspection; Quality and Safety Come First.
Verifying a home’s safety, structural integrity and soundness depends on a detailed and thorough home inspection. Therefore, hiring a reputable inspector is paramount. Although most loans forbid skipping this very important step, it’s not an uncommon practice. Most loans require the homeowner to carry homeowners insurance, which protects their investment. Upon inspection completion, repair costs are frequently shared between the buyer and seller. However, depending on the housing market, a motivated seller may cover them.
Don’t Leave the Chat; Responsive Borrowers Become Homeowners
Paperwork is inevitable with the Loan Process, and Time is of the essence. In truth, borrowers work in tandem with mortgage lenders and their agents. Consequently, buyers can’t expect quick loan approvals when it takes a week to return an email. Therefore, prompt and professional correspondence makes for optimal home-buying experiences. Vigilant borrowers prioritizing lender requests streamline underwriting timeframes and get quick results. Suitably aligned lenders efficiently process loans with responsive home buyers.
Don’t Sugarcoat Anything; Honesty is the Best Policy
Avoid dishonesty in any way with lenders or real estate agents. Everyone prioritizes an honest client-agent relationship. This may sound simple, but some people don’t understand the value of transparency regarding their personal finances and work history. Simply put, the underwriting team will find the skeletons in the closet, so it’s best for borrowers to be transparent about any undesirable aspects of their financial history.
Now you know what not to do when buying a house. Let’s connect with a lender who can help.
Finding a trustworthy mortgage lender to guide buyers through the process is crucial. You want to find a lender that is diligent in getting you competitive mortgage rates and someone with experience. Most importantly, Mortgage Insiders definitely know what not to do when buying a house.
Your home plays a significant role in financial security. So, regarding your mortgage loan, you want to be sure you’re making responsible decisions. Undoubtedly, the loan process invokes insecurity in many people. In particular, navigating through a sea of paperwork and financial jargon can be unsettling without honest guidance. In fact, a lack of clarity can lead you down the wrong path and compromise your financial future.
Mortgage Insider has helped thousands of families reach their goals to create stronger financial futures. You deserve to work with a lender who brings clarity and has your best interest at heart. Mortgage professionals help with refinancing, lower interest rates, and ensure that their clients make the best decision for the life of their loans.
The Steps are Simple:
- Schedule a Call: An experienced loan officer can discuss your needs and guide you through the possibilities.
- Get Approved: We’ll help you through the application process and facilitate the steps for approval.
- Exhale: Put your feet up and feel secure knowing you made the best decisions about your home loan.
With proper guidance, you can get your first home, accommodate your growing family, and start that renovation project—whatever goal is on the horizon. An alliance with Mortgage Insider will give you the confidence to know that your mortgage loan is setting you up for financial success. Mortgage Insiders offers today’s latest financial news and mortgage trends. Subscribe to our the channel for current events.
