|
Most common mistakes made when "BUYING" OR
"REFINANCING" a home!
Purchasing a new home or refinancing the one you
are currently living in should always be a
pleasant experience. There are pitfalls you can
avoid to make certain things go smooth for you
from start to finish.
Here are some of the most common mistakes made
by individuals when buying a home:
1.) Looking for a home "without" getting
Pre-Approved !
A Pre-Qualification and a Pre-Approval are not
the same. Don't let anyone tell you any
differently. A Pre-Qualification is an
assessment of your ability to get a loan without
the investor having all of the facts. A
Pre-Approval on the other hand is when you have
provided all related income information, bank
statements, etc...to make a final "formal"
decision on your loan. By getting Pre-Approved
it is like having the money in the bank.
2.) Verbal Agreements
Always get everything in writing from both your
lender detailing terms of the transaction (Good
Faith Estimate), as well as confirmation you
loan has been locked in when it has been done.
In addition...if any changes to your purchase
contract have been made throughout the course of
negotiating the price of your home, make certain
to get copies of all related changes. This
course of action will eliminate any unnecessary
surprises at the end of the transaction.
3.) Choosing a lender just because they have
the lowest rates.
While the rate is important, make certain you
are made fully aware of all related closing
costs on the transaction to include points,
discount points, and junk fees. Many of these
fees could cost you a lot more in the long run
than another lender who's rate may be slightly
higher, but with much lower fees.
4.) Incomplete documentation and time delays.
It is most important that you provide any
related information to your lender up-front as
requested or any information requested
subsequent to the initial request. Be sure to
return any related phone calls in a timely
manner !
5.) Buying a home without professional
inspection.
If you are not purchasing a new home, which
includes warranties on most equipment, it is
highly recommended that you get a roof and
termite inspection. This way you know up-front
what you are buying. If the reports reflect work
has to be completed to avoid problems down the
road, the likelihood is that the seller will be
agreeable to either having the corrections made
or provide you with a closing credit to have the
work completed yourself at a later point. If the
seller agrees to do the work prior to the close
of escrow, have the property inspected at which
time the work is completed to make certain
things are done correctly !
6.) Not shopping for home insurance until
which time you are ready to close.
At which time your offer on a home has been
accepted, start making calls to a few reputable
companies for quotes and to make certain they
can meet your time frame to have coverage in
place on the home at the time you close escrow.
7.) Avoid funding delays.
Keep lines of communication going with both your
lender as well as your Realtor. Get loan
documents signed a week or so before the agreed
upon funding date as it will allow all parties
concerned to complete their final review to make
certain your loan funds on schedule.
8.) Taking out new loans before you have
completed the loan process.
NEVER take out new loans to include either
credit cards, car loans or an equity loan before
you close on either your refinance or purchase
transaction! If your debt ratios are marginal to
begin with you could jeopardize your ability to
close on your transaction and end up being
either turned down or offered other options.
9.) Existing loan obligations.
ALWAYS continue to make your payments on
existing debt as payments are scheduled. It is
not uncommon that investors do a last minute
audit that could result in an updated credit
report being pulled. The last thing you want to
do is to have any late payments pop up. |
|
