Things to avoid before buying a house
There are many things that can ruin a home purchase, just getting a house approval is not enough.
Many of these are mortgage issues, and if you have a good mortgage broker or a real estate agent many of these points will already have been mentioned in you.
Making mistakes is easy, here are some tips on how to avoid them and keep them in mind.
1) Loan Payments- All payments on credit cards and car loans should be met as the lender will look at your credit again when finalizing the mortgage, if any payments are missed your loan can be retracted.
Lenders can revoke a mortgage commitment if they find your payments are not done.
2) Be careful before consolidating debt- Debt consolidation can seem tempting while buying a home as it allows you to bring all your debt under one payment, however there are many interest rates and hidden fees that can increase without a warning. Make sure to read all the documents before consolidating debt.
3) Don’t shift finances before getting a loan- When a lender approves for a loan, it is based on the financial statements you have shown, do not change these statements as the lender might not be comfortable with the change.
If there are any change you would like to make, keep them after you get your mortgage as the lender will question you if you start moving your money around.
4) Avoid buying car- Buying a car and purchasing a home is a common mistake, as people are overwhelmed about having their own home and they try to improve their life further by buying a car. As your loan was pre approved without the car being in your statements and debit card at the time of approval, buying a car on credit may lead to you not getting loans for your home.
5) Avoid lying on your loan enquiry- You may not have the intention of lying but it should be stated either way. It is a fraud and if the lender is aware of this you will lose your loan. Even making an honest mistake can cause problems if the truth s discovered. Make sure the loan period is not stretched and all the information is accurate.
6) Don’t cover closing cost with the money you will use- The time period around buying a new house is of financial scarcity and money can be tight. Avoid spending money on covering closing cost, as it is more important to cover those costs when you are about to buy the new home.
7) Avoid being a co-signer- Avoid co signing a loan with anyone as you are obligating yourself financially, if the lender needs money and can not get fund they will come to you for payment.
Home lenders are aware of this and disapprove any applicant who has co signed. Keeping your credit and financial situation stable until you have closed on the house is important.
8) Don’t buy furniture on credit- Using credit to get household items will get you into a new debt and you will want to spend money to fill your new home with beautiful appliances, but you have to be patient.
A new debt will change your state of credit and can lead to a red flag in your lenders eyes.
9) Don’t spend more than the value- Sometimes the real estate market gets expensive, it is called ‘sellers market’. In order to get the property you love you sometimes spend more than needed. Where there are may offers there is a possibility for the sale price to go up. When the home doesn’t appraise the borrow will have to raise the price of the house, and they will not drop the prices. Your load might be rejected if the difference in price is not made up for.
There are many mistakes that can be made when getting a mortgage, and with this information the mistakes can be reduced and even not be made. Finance should be taken seriously and there are many ways it could go wrong.