We’re all about buyer education here at Homespire Mortgage. We want to make sure you have all of the information you need to make well-informed, responsible home buying decisions. So let’s talk about the 5 home buying pitfalls that will hold you back from home buying success and how to avoid them.
Pitfall #1 – Not Being Prepared
In order to qualify for a mortgage, your Loan Officer will need to take an in-depth look at your financial picture. They’ll evaluate your debt-to-income ratio, credit score, and credit history. You’ll need to show proof of employment, tax returns, and statements for any financial accounts. So you’ll want to have all of that information gathered before meeting with your Loan Officer. Also, it’s a great idea to take a look at your credit report and deal with any discrepancies, if needed, before jumping into the process. It’ll make things move along more smoothly.
Pitfall #2 – Going Over Your Budget
So many people buy more house than they can actually afford, which only leads to frustration when you find you can’t cover the costs of your home. It’s important to look over your budget to see what you can realistically and comfortably afford each month. This will also save you time when it comes to shopping for a home because you won’t be looking at homes that are out of your price range. Try to keep your monthly mortgage payments at 28% or less than your monthly gross income. Check out our affordability calculator and play around with the numbers to get an idea of what your monthly payment could be.
Pitfall #3 – Not Understanding the Difference Between Pre-approval and Pre-qualification
You may hear the terms pre-qualification and pre-approval used interchangeably, but they’re very different. A pre-approval means you’ve submitted your income and asset documentation to be reviewed, along with a credit report by the lender; whereas a pre-qualification is based on extremely preliminary info and is not nearly as a deep of a look into your overall credit profile.
Pitfall #4 – Not Getting a Home Inspection
A lot of times we see new homebuyers trying to save a few bucks by skipping the home inspection. While a property may seem fine to you, having an inspection done by a professional can help find things you didn’t know you should look for. This can save you from buying a money pit that needs a lot more repairs than you thought. It also gives you the leverage needed to negotiate with the seller to either have them fix the problems or lower the price of the home.
Pitfall #5 – Not Budgeting for Additional Costs
When you are budgeting for a mortgage, you need to remember that there are other costs involved, such as the closing costs, which can be around 3-5% of the purchase price. And then you’ll need to think about regular home maintenance, utility payments, and putting money aside for eventual repairs.
If you are in the market to buy a home, remember, the first thing you need to do to get the ball rolling is to get pre-approved. But don’t worry, we got you there. Visit https://www.homespiremortgage.com/loan-officer-search/ to get started, and we’ll see YOU at the closing table.