THE DO’S AND DON’TS OF BUYING A HOME

stephen Buying , Real Estate Leave a Comment

Some of these recommendations might sound like pure common sense to you. Others may appear to be advice derived from many years of real estate experience, which they are. Please call anytime with your questions.

 

The Do’s…

  • Determine how much home you can afford. Based on • your income and expenses, prepare an honest, verifiable, detailed monthly budget.
  • Validate your credit score. This figure is crucial to qualifying for a mortgage and earning the best possible interest rate.
  • Profile yourself as a borrower. Are you a first-time buyer? Self-employed? In the military? Any credit issues? Ever had a bankruptcy or foreclosure?
  • Find a lender you can trust. Research lenders online, overthe phone, in person, talking to friends and acquaintanceswho own homes. Compare their loan offers.
  • Explore recommended questions to ask lenders that go beyond the usual rates, terms, and fees. You want a feel for each lender’s process and also to uncover any hidden costs.
  • Get pre-approved to acquire a more personal idea of what loan you can expect. Be honest with them (they’ll find out whatever they need to know about you anyway). Inform them of child support, alimony, wage garnishments, or any other payroll reduction.
  • Be extremely careful what you say when touring a home that’s vacated for your showing. An increasing number of sellers use security cameras and microphones to eavesdrop on potential buyers as they tour their house. Sellers then may use what they hear and see as leverage in price negotiations.
  • Also, be sure you purchase homeowner’s insurance before closing!

The DO not’s…

  • Make any cash deposits to your checking account. All funds must be traceable. Before depositing anything out of the ordinary (business expense reimbursements, tax refunds, gifts) into your checking account, contact your lender. Obtain a gift letter and a bank statement for deposits from friends and family. Call before making any purchase of $500 or more.
  • Shift any of your finances around before your loan is approved. When a lender notices you moving money around various accounts, you will be asked to explain why.
  • Buy a car.
  • Open a new credit card or lines of credit.
  • Make any changes to your line of credit without informing your lender.
  • Order satellite TV, cable, telephone, internet, or any utility that will pull a credit report on you. Otherwise, you will need to write a letter of explanation about the credit inquiry to your lender.
  • Open any new bank accounts.
  • Quit or change your job. The lender closely examines your employment history. Keep any future changes private until after closing.
  • Speak directly with sellers.
  • Change your name during the mortgage process.
  • Wait to see every house on the market before making an offer. In today’s market, buyers write contracts quickly on homes they like. If you delay, yours might be gone.
  • Speak negatively about a property with the owners present.
  • Call any agent whose name is on “For Sale” signs. They’re working for the sellers, not you.
  • Delay any paperwork from your lender, regardless of the frequency and number of requests.
  • Visit any new-construction sites and neighborhoods without your realtor.
  • Schedule a vacation before closing, especially a prepaid, nonrefundable cruise or trip.
  • Co-sign anything! Not even for a candy bar!

IN CONCLUSION…

Your lender and I are here to answer all your questions.

Specifically, what I need to know is whether you have a house to sell and if you’re allergic to animals. Also, do you have properties you’d like to see? I have a key to every home on the market, including those for sale by owners.

In the meantime, you may be interested in what we in the business call the “80/10/10 Rule”: If you find a house that has 80% of what you are looking for, 10% of what you can change and 10% you can live with, it’s usually a keeper.

About the Author

stephen