TIPS FOR THINGS YOU SHOULD NEVER DO WHEN BUYING A HOUSE
The last thing in the world you would ever want is to devote most of the time to find out a house. Many common mistakes homebuyers make would make the method for buying a house is more painful than it has to be. You have done everything right, saved for a deposit, built your credit, and now you are under contract to choose a new home. “Doing” any of these things listed below could cause your purchase to go sideways. Read this carefully just before closing.
1. DON’T BECOME SELF-EMPLOYED BEFORE OR DURING THE LOAN PROCESS:
Your mortgage lender craves job stability and reliability of income for the distant future, so changing jobs before you close on your new house would send up red flags. Quitting your job during the method would not re-evaluate all right. Lenders want to see 2 years of tax returns, so this also applies if you’re in business for yourself.
2. DON’T LIE ON YOUR LOAN APPLICATION:
Not only is this just wrong, but it is also called loan fraud and therefore the penalties are steep.
3. DON’T BUY A CAR:
There are three major categories that a lender going to look at when approving you for a loan: Credit, Assets, and your Debt-to-Income Ratio. Purchasing a new vehicle will likely affect all three of those items for many people.
4. DON’T LEASE A NEW CAR:
Banks treat lease payments like all other debt and, most of the time, there is a good amount of cash that needs to be put down to lease a car. You should all of your money and credit available until you close on your home.
5. DON’T CHANGE BANKS:
Everything that is verified at the start of the loan process is also re-verified just before closing. Changing banks during this point just make longer spent and paperwork for you and your lender.
6. DON’T GET A CREDIT CARD:
This goes alongside obtaining new credit. You need your debt-to-income to be better when you are nearing closing day. Do your best to not add any additional debt to your cards.
7. DON’T APPLY FOR A NEW CREDIT CARD:
New inquiries for credit confuse mortgage lenders, and that they present major red flags. Your credit score is going to be checked again just before closing to make sure that everything is that the same as when you were approved. It is best to wait until closing before establishing new credit.
8. DON’T CLOSE EXISTING CREDIT ACCOUNTS:
While this is a good idea, it is not while trying to get a mortgage because it could lower your credit score. If you want to close a credit account, you are reducing your available credit. So, if you’ve balances on other cards, your percentage of credit “utilization” goes to extend.
9. DON’T IGNORE LENDING REQUIREMENTS:
There are two people you have to satisfy when getting a home loan: The appraiser and therefore the underwriter. The underwriter who is working for your loan may require a document to offering you a “clear to close”. Give every effort to getting them what they need for your loan to close on time.
10. DON’T CO-SIGN A LOAN FOR ANYONE:
It’s a dangerous and risky financial move whether you’re getting a mortgage for yourself or not. Of course, your lender would need to factor these other loan payments into your debt-to-income ratio.
11. DON’T DRAG ON BILLS:
Paying your bills on time is a record of responsibility, so skipping a bill or having to make a late payment strongly affects you.
12. DON’T ALLOW YOUR EMOTIONS TO GET THE BEST OF YOU:
Buying a new house is always exciting but sometimes the method can look overwhelming. Many times, this happens when first negotiating the initial sales price, but emotions can run high when negotiating repairs that have come to light through the house inspection. As a buyer, you shouldn’t ask every little thing to be fixed, also not be expected to repair major issues either. Everything is negotiable.
13. DON’T GIVE YOUR EARNEST DEPOSIT DIRECTLY:
This typically occurs when buyers purchase an FSBO. An earnest Deposit is a straightness deposit that will only be spent by the seller if the customer defaults on the acquisition agreement. Realtors automatically have this deposited in their company’s escrow account until closing. If there are no Realtors, the seller feels that they can spend cash freely.
14. DON’T SPEND YOUR SAVINGS:
There are many expenses that your cash will have to go towards, like your deposit, closing costs, inspections, appraisal, etc. The lender can also require a particular amount of money reserves additionally thereto, so unless you are loaded, go easy on your savings.
15. DON’T BECOME FRIEND WITH THE SELLER:
The customer and the seller should never talk to one another personally. Because emotions can run high with both parties, you could run into issues that would negatively affect you if you and the seller become too friendly.
16. DON’T BUY EXPENSIVE THINGS ON CREDIT:
You have been official, inspections are over, and you’re a few weeks away from closing. You’re feeling great and determine that the furniture store down the road has an 80% off sale. Remember, the underwriter goes to see your credit standing just before closing, so wait until closing to avoid any problem.
17. DON’T PANIC IF THE APPRAISAL FOR YOUR NEW HOME COMES IN LOW:
Every once in a while, we see a situation when the appraisal comes in less than the sales price. While this could be challenging, it’s not the end of the world. Since getting an appraisal is a contingency for obtaining a loan, the seller has to drop the worth of the house otherwise you could get out of the contract.
18. DON’T BE ALONE:
If you are working with a Realtor, they will actually take the burden off you by scheduling inspections, negotiating repairs, and communicating together with your lender and therefore the title company. They are there to make things run as smoothly as possible. It is their job. Who else can be the best assistance for you in such cases than Izabella Lipetski? She is the most promising Real Estate Agent and got several awards from real estate associations on her great work in real estate market of California.
There are many important things to think about when purchasing a home. It is one of the happiest and important decisions of your life. To make sure that you simply get the house you would like, once you want it, you need to know and follow those above tips. Doing so will raise your chances of finding perfect home and getting it. Remember that financials are important when it comes time to use for a mortgage. Make that your priority.
Are you trying to find a house in East Bay California? Izabella Lipetski is always available for you. Izabella Lipetski is the top real estate agent in East Bay California. She likes to help you in finding your dream home and does not make any of the above mistakes in the process! Contact her right away for a free consultation.