Buying a house is one of the biggest steps in your life. This is especially true if this is going to be your first home and the first real estate that you are buying on your own. We are all excited about that step, and usually, we prepare for it for many years prior to the event. Not many people are able to get a new home right away, and they need to think about the way they are going to get enough money if they want to get a mortgage, sell something else or have their family to help.
No matter what your specific situation is, you know that this can be a really stressful period and you want the whole process to go as smoothly as possible. To help you out with your goal of investing in a new home, we created this article. Here you will learn more about the mistakes new homeowners do and we will tell you more about the things buyers should not do before they buy a house.
1. Don’t switch jobs
One of the biggest mistakes you can do before you decide to take a mortgage and invest in a new home is to switch jobs.
When lenders check out your history, they are more likely to give you a better loan, or lower rates if you have been in the same work for a long time. You need to be financially stable, and when you are just a few months into a new place of work, you may not get the loan you want.
2. Try not to invest in other big projects
You want to save as much money as possible before you get a house, so buying a new car, or investing in something else, maybe a big mistake.
Try to postpone that for as long as you can, or at least until you get the place and sign all the contracts. When you do that, you will have a better idea of how much money you have left, and if doing that is a smart move.
Investing in other big projects may lead to a change in your credit score, especially if you decide to get a loan for that as well. Stay put until you get your new place.
3. Don’t take out other loans
A home is not complete without the furniture, and you cannot move in if the home is not renovated and ready for people to live in there.
However, before you get the house, you should not take out loans for other things. This includes furniture, home appliances, remodeling, and so on. Getting another mortgage will affect your credit score and you may not be able to pay off all the debts. Click here to read about the other factors that can affect your credit score.
4. Don’t stretch too thin
Everyone wants to get something perfect, and we may even think that we can afford a place that is a bit out of our price range. You may even hope that the lender will give you a bigger loan and that you will be able to pay it off quickly.
The first thing you need to know is that the lender will access the real price of the home. According to Think Plutus, the bank will arrange a survey so that they never give you more money than the home is worth. There are different types of surveys, and they determine the size of the loan.
If you notice that you cannot get as big of a mortgage as you hoped for, maybe it is not the best idea to stretch yourself too thin. There are thousands of other properties, and you will find one that fits your budget.
5. Put your emotions aside
Try not to be emotional during this process. Things can get heated quickly and you may rush with your decisions. Everyone wants the perfect house with the nice backyard and the white picket fence, but if you cannot afford to get it, then don’t.
You don’t have to get the newest house on the market, and if you get a fixer-upper, you will save money at the beginning and you can create the perfect home later on. Think with a cool head and remember that if you show you love the house too much, the seller may change the price and try to get more money out of you.
6. Your agent is extremely important
The person who is going to show you the houses is one of the biggest parts of this whole process. So, before you decide on a realtor, you need to do some research.
Find someone you can trust and who has a lot of experience in this. The listing agent or the person who represents the seller is not interested in protecting you and making a better deal for you.
Because of that, you need someone exceptional in your corner. You need a person who is going to be able to lower the price down, who thinks about you, and who is going to help you out during the whole process.
These are some of the things you should avoid doing. You should never lie about the money you have, especially to the people who are going to do a lot of financial background checks. This is especially important when you have to fill out the loan inquiry. Even if you try to stretch out the truth, they will find out and it won’t be to your advantage.
Don’t forget to get insurance even before you move in. Even though this may sound like something you can postpone, insurance is more important than renovating the kitchen or buying better furniture.
This is a project that will take a long time, so don’t rush things. Make sure you have enough money for this step, don’t get a loan that is too big for you, and remember that this is something you are going to commit to for many years to come. If you don’t think you can afford a new place right now, wait for a couple of years when your finances are more stable and when you can make a better choice.