7 Tips On What Not To Do During The Process Of Purchasing Your Home
As a first-time home buyer begins the journey to buying a lovely home, you probably think buying a home is all about getting the money, making the deposit and moving into your home. Of course, it is easy to make mistakes being your first time of purchasing a home. Here are some crucial steps for a first-time home buyer which informs you of the things you can do and cannot do.
It is possible to receive a mortgage pre-approval; complete your home search and even make an offer for the home you love. To make sure the home purchase deal goes through, let’s discuss some pitfalls you must avoid until the sale gets closed. Most of these mistakes are preventable, and if you have a brilliant mortgage broker or real estate agent, he/she would have gone over some of these points. To reduce stress, we believe it is critical for a first-time homebuyer to understand essential steps to owning a home.
- Don’t make a large purchase on credit before the loan is approved.
The idea of buying your first home is undoubtedly an exciting one, and you might start thinking of ways to be comfortable when you move into your house. Making large purchases like buying a car or other expensive items can hamper your home buying plans. Getting a pre-approval for a loan was based on what your credit situation and debt load were at the time you got the pre-approval. Adding another debt to the state of your credit might make your loan get unapproved eventually.
- Don’t switch from a salary-based job to one with commission-based income or lose your job.
It is a fact that the time you are trying to purchase a home is not the time to change jobs. Lenders look at your employment history to be sure that you will be able to repay the loan and that you are financially stable. Changing your job before getting a loan sends a message to the lender that you are not stable, and you may be unable to keep up with the stability needed to maintain a steady income to pay back your loan. If at all you would change jobs, you should not switch from a salary-based job to a commission-based job. It’s important to realize, your loan will get unapproved outright. Lenders love stability and as far as your job history is concerned, keep it stable.
At any rate, make sure you remain on the job that you have when your mortgage was pre-approved. A loss of a job can disrupt your loan approval process and make you get unapproved for the mortgage.
- Don’t miss loan payments or get late on your loans.
All your loan accounts should have current payments on them. Your credit cards, car loans and any other type of loans that you have should have your current payments on them. There should be no outstanding payments as your lender may not approve your loan because of this reason. This is a crucial step to buying a first home.
- Don’t falsify or keep any information to yourself.
Find all the paperwork of everything going on in your life; from your bank statements, divorce decree to your tax returns documents and disclose them to your lender. Therefore, leaving out vital information whether knowingly or unknowingly may cost you your mortgage loan. So, when following the steps for a first-time home buyer, you should make sure you that all the information you submit is accurate. In addition, Information as trivial as child support should also be disclosed. You do not want to be disqualified for a mortgage based on trivial issues.
- Don’t make large deposits into your bank account when processing your loan
Your lender will not feel comfortable about seeing a large sum of money in your bank account suddenly. Of course, It is even better for you to have the money for your down payment in your account for a minimum of two months. The two-month period is referred to as seasoning, and it is a pointer to the fact that you are a stable borrower and will be able to maintain the mortgage’s repayment plan. If you start making significant deposits or inconsistent transactions on your bank account, the lender may get the wrong idea and pull the plug on your mortgage approval.
- Don’t consolidate your debts
Debt consolidation may be a great idea when you are planning to buy your first home. A lot of loan consolidation offers to bring all of your loans together so you can have a single payment for all of them. This works for some people, but you need to know that the interest rates can change at any time and there may be some hidden charges underneath. Make sure you understand what consolidating your debt will do for you, so you do not end up shooting yourself in the foot.
- Avoid co-signing for anybody
Co-signing a loan puts you in a financial obligation because even if you are not the one who took the loan and the situation arises that the lender needs to collect their money, they will come to you. Home lenders understand this, and there are times lenders will not want to approve any loan applicant that cosigns for someone else.
Ultimately, as a first-time home buyer, you need to be aware of the above-listed steps to owning a home. The points discussed above are essential, and an equally important point to note is that your financial and credit state should be kept stable until you have closed on the home purchase. Click here to begin the journey to buying your lovely home.
Denise Sherman served in the Army as a Logistics Officer and now serves her community as a REALTOR® with Carrow Real Estate Services. She combines her love for the industry with her passion for helping first-time homeowners and business owners make good real estate decisions. The team will develop a strategy to understand your objectives and accomplish your goals. We look forward to serving your family or businesses as well.