Tips for Homebuyers
The home buying process can be confusing and complicated, especially if it’s your first time. If you’re planning to buy a home soon, here are a few tips to help you stay on track before and during the home buying process. If you have questions or would like some more information about purchasing a home, do not hesitate to contact me!
Maintain Your Credit and Available Funds
Applying for a home loan is a sensitive process. When you are pre-approved for a loan, the lender is approving your existing credit, available funds, and debt-to-income ratio. Major changes to any of these could decrease or even lose you the loan. Below are several things to avoid while looking for a home and seeking financing. If you still want to do any of these things before or during your search for a home, consult your lender first.
- Don’t buy or lease a car before you apply. Lenders look at your debt-to-income ratio. A large payment or other significant purchase can impact that ratio and prevent you from qualifying for a loan.
- Hold off on buying the furniture and appliances. You don’t want to add big, new purchases to your debt or take from your available funds for closing costs.
- Don’t attempt to consolidate bills before speaking with your lender. It’s not the time to go rogue with your finances. Talk with the experts first.
- Don’t move assets from one bank account to another. Transfers appear as new deposits, which can complicate the application process. You’d have to disclose the source of funds for each new account. So, just skip the headache.
- Don’t change jobs. A new job may require a probation period before income from the new job can be considered for qualifying purposes.
- Don’t run your own credit report. It will show up on your lender’s credit report and need to be explained in writing.
Don’t Forget Closing Costs
Your down payment is not the only thing you need to close on a home. You’ll also need to cover closing costs which are the expenses that go to your lender in exchange for arranging the loan services. These services include appraisal fees, escrow fees, title insurance expenses, and more. Your loan provider will give you a closing cost estimate when you apply for the loan, but the final number will not be decided until you are closing.
Don’t Skip the Inspection
Submitting an offer on a home with a waived inspection may seal the deal, but this could come at a major loss to you down the road. From roof damage to foundation issues, an inspector will be able to tell you the condition of the property before you buy it. If the inspector does find issues, you can decide to take it as-is, negotiate repairs with the seller, or walk away.
