What should you not do when buying a home?
-Don’t open or close credit accounts
-Don’t switch jobs
-Don’t shop for homes you can’t afford
-Don’t skip the inspection
-Don’t forget to hire an agent
Purchasing a home is a life changing,exciting event. There are many things you should think about such as finding the right neighborhood, the right mortgage and the right time. This can be a challange in today’s seller’s market. Before you buy, take a look at these five mistakes to avoid when buying a home.
1. Don’t open or close credit accounts
When you are geting a mortage, a lender will check your credit several times through the homebuying process. It is very important that you do not open or close credit cards or lines of credit. When you do this, it can change your credit score. If you add a line of credit, it can increase your debt-to-ratio ratio which will lower your credit score. This can cause a lender to deny approval of your application. If you are going to apply for a mortage, try to pay off exisiting loans but do not close the account. Leaving the credit open will help your credit score because the credit reporting beureaus look at the length of available credit.
2. Don’t switch jobs
Employment stability is crucial when it comes to lenders. Your employment stability is looked at in order to be pre-approved and approved for a mortgage. A lender is looking for two consecutive years at a job. This is important because it shows that you can pay your loan. Someone who has an unstable history of emplpoyment may not be able to repair a mortgage note.
3. Don’t shop for homes you can’t afford
When starting the home search, be sure to look for a home that is listed for around two and two-and-a-half times your gross annual income. Basically, do not plan on spending more than 30% of your income on your mortgage payment. Sometimes a lender will try to push this number but they are not considering maintenance, repairs, insurance, property taxes, homeowner’s association fees (if applicable), and other unforeseen costs.
4. Don’t skip the inspection
You might save on spending the money to get a home inspection, but it could end up costing you more in the long run. You need to save for unforseen repairs. A home inspection can shed light on what needs to be fixed on a home before you purchase it and protect the buyer’s investment. If you have a home inspection done, you have a safety net that allows you to back out of the contract penalty-free.
5. Don’t forget to hire an agent
A sales agent can help you navigate the complicated process of buying a home. The process can be both challening and time-consuming. A sales agent knows how to navigate the market and get you the best deal on a home. You will be able to find the best home for the best bang for your buck.