5 Things NOT To Do When Buying A New Home
Buying a new home can be one of the most exciting accomplishments in your life. It is a part of the American dream. You’ve been working hard and finally got enough money saved. You’ve been paying off your debt and your credit score looks good. So now you are ready to purchase your new home! But before you start packing to move, make sure that you are not making one of these detrimental moves that could severely slow your home buying process...
Mistake #1 - Asking everyone but a professional licensed Real Estate Agent
Your co-worker just bought a home. So did your aunt. And you can’t forget about your childhood friend on Facebook. Although you may get inspiration from your surrounding community about getting into real estate, it’s important to field all your questions through a professional licensed real estate agent. Someone else’s journey may look completely different than yours. Plus when you consult a professional, you get the benefit of someone who has taken hours of classes and studies around Real Estate License Law for your state. Agents also take continuing education classes to keep their license current. This is valuable because they know the latest trends for the market, area, rules and regulations concerning buying a home.
Mistake #2 - Not obtaining an evaluation from a Loan/Mortgage Officer
One of the first things you should do BEFORE you start your search for a new home is to get a pre-qualification from a Loan/Mortgage Officer. This helps you and your Real Estate Agent to know the price range of homes you can buy.
A Loan/Mortgage Officer is the professional who obtains the loan for the buyer. This is who will gather all your financial information such as bank statements, check stubs, taxes, etc to determine how much home you can afford to purchase. First there is an estimated amount (pre qualify) then there is an actual amount (qualify) based on your credit history.
Mistake #3 - Assuming your credit score is where it needs to be
Every major item you purchase depends on a credit score. There are several ways to obtain your credit scores. The most popular are sites like Credit Karma and major credit bureaus such as Equifax, Transunion, etc. Credit Karma is a consumer reporting credit agency that gives you an estimated credit score. This means there is a strong possibility that the score you see on Credit Karma will not be 100% accurate. Major credit bureaus are used by retailers, car companies and banks. Your credit score for buying a home will most likely be different from what you see on consumer reporting agencies. So it is best to consult a Loan/Mortgage Officer.
It’s also important to note that the credit score requirements vary based on the type of home loan. The most common type of loans are FHA, Conventional, VA, or USDA. Your Loan/Mortgage Officer will be able to tell you if you meet the qualifications depending on the loan type you desire. Your credit will be run at minimum two times during your home buying process. Once at the beginning of the process and just before you close on the house to ensure there are no changes. So it’s important to practice those same good credit practices that you used prior to starting the process but more on that later...
Mistake #4 - Not being properly prepared for ALL things that come with buying a home
Being properly prepared for buying a home is more than having a few dollars in your savings account. It means considering more expenses, more problems to take care of, and yes more room. So start preparing EARLY. Maybe you’ve saved the money for the down payment and maybe even the closing cost too. However, have you thought about the other items you will want and need once you move in?
Blinds needed for windows
Deposits for water, gas, electric bills
Alarm and security system
Garage door opener
These things are normally not in the original house buying budget. Try to save for these items too because they are the first things you may need going into a new home. Other things to consider include:
Cable/Internet
Landscaping tools and materials
Renovations such as painting, floors, etc.
New appliances
Mistake #5 - Making big purchases BEFORE you own the home
Excitement can be dangerous when purchasing a new home. Your imagination begins to run wild on all the ideas and plans for your new home…..but WAIT it's not yours yet. The BIGGEST MISTAKE that buyers make is buying big ticket items before you move in. We know, all of a sudden there are ALL KINDS of SALES…. White Sales, TV Sales, Furniture Sales, Rug Sales, etc, etc, etc…….
HOLD IT…. You can’t furnish a home you don’t own yet, so be patient! And if you must buy something for your new place, please DO NOT USE CREDIT. Buying items that cost hundreds and thousands of dollars by utilizing your credit cards or opening new accounts will impact your score and could majorly affect your final approval of your loan. So before you buy a new car to fit in your new garage try living in the new home first, getting used to the new bills, seeing how things you already own look in your new place with the different lighting. It normally takes about 6 - 12 months before a new homeowner gets comfortable with paying the new bills associated with a new place.
So let’s review…These are the top 5 mistakes you don’t want to make when buying a new home:
Mistake #1 - Asking everyone but a professional licensed Real Estate Agent
Mistake #2 - Not obtaining an evaluation from a Loan/Mortgage Officer
Mistake #3 - Assuming your credit score is where it needs to be
Mistake #4 - Not being properly prepared for all things that come with buying a home
Mistake #5 - Making big purchases BEFORE you own the home
By avoiding these mistakes you can assure that your home buying process will be much smoother and less time consuming. Are you now feeling ready to begin your home buying journey? Contact us today and let Anderson Advantage Realty find you a place called home!