Blog > 7 Pitfalls of the Home Buying Experience
- Not checking your credit score
Checking your credit score should be the very first thing you do before purchasing a home. You need to know what you’ll be able to expect from the lender. Your credit score can severely affect the amount the bank is able to lend you. If you are considering purchasing a home in the next 18-24 months, we would suggest looking at your credit and seeing how you might be able to improve it.
2. Not Getting Pre-approval
Getting pre-approved by your lender is one of the first steps in the home buying process. A pre-approval letter is basically getting information from the bank about how much you are able to borrow. This will help determine what price range of houses you will be looking at. This also gives the sellers a confidence that you are serious about purchasing a home. Without a pre-approval letter, it can take longer to secure your loan once you’ve put in an offer and it has been accepted.
3. Not starting off with a Budget
Having a budget during your home buying process is very important. You want to make sure you establish this before you begin looking at homes. This will help you not get side tracked by homes outside of your price range. Make sure to have a monthly budget for things like your mortgage, utilities, and homeowner association fees. By having a pre-approval letter, this can help you determine what kind of budget you need to set. You may also need to make a budget for home repairs if you plan on doing any renovations after moving in.
4. Forgetting about Added Cost
When looking at homes, it’s important to remember all of the little things you might not be thinking about such as utilities, property tax, and homeowner association fees. These will all be on either a monthly or yearly basis. Make sure to save some of your budget for these added costs.
5. Skipping the Inspection
The idea of skipping an inspection sounds like it’ll make life easier – don’t do it! Yes, you would probably save a couple hundred dollars, but in the long run it is not worth it. Inspections are critical to understanding the current condition of the home. They are looking for things that could easily get passed over if you did a quick run through. This might also help you negotiate a lower price on the home or ask for a piece of equipment to be replaced.
6. Making a Large Purchase during the Home Buying Process
We highly recommend not making any large purchases while you are in the process of purchasing your home. Anything you charge to your credit card goes against your debt to income ratio, which could seriously jeopardize your loan approval. It is best to wait until after you close to buy things such as furniture or other miscellaneous goods. The lender will look at things like furniture, a new car, or a new tv as more payments that might jeopardize you being able to pay off your mortgage first.
7. Not Visiting the Property Enough Times
We recommend that you try to visit the property at least twice before putting an offer in on the house. You need to make sure that you are going to be purchasing the right home for you. It’s a big life changing decision! While you are waiting to put an offer in on your home, consider driving through the neighborhood during weekends and evenings. Checking out the neighborhood when the majority of the residents are home can help you determine whether the area is a good fit for you and your family. This might not be possible in all situations, but the more information you can gather, the better!