Homebuying involves many steps and procedures, contributing to an efficient and thorough process. Scheduling an inspection, final walk-through, booking movers and preparing for the closing are all essential steps in the homebuying process. However, there are also some crucial things that you should avoid doing before you close on a home. Read on for insight into what every homebuyer should avoid before closing a home.
Selecting the first mortgage lender you meet
If you’re financing a home purchase through a mortgage loan, shopping around for mortgage lenders is essential. Talking with several lenders can give you the best idea of rates and what you should pay for a house. You can use this information to compare your down payment and the monthly payments you’re willing to make.
Extending an offer without a pre-approval letter
Before you begin house shopping, a pre-approval letter can give your offer the edge it needs, especially in competitive markets. If you extend an offer and still need to be pre-approved by a mortgage lender, the seller may decline your offer in favor of a buyer who already has their pre-approval letter.
Putting an offer on a home you can’t afford
When you’re buying a home, your mortgage lender may offer you a loan you qualify for but can’t comfortably afford. You should know what you’re comfortable paying monthly and stay within that range, regardless of what the lender offers. Knowing your monthly expenses, such as memberships, car payments and tuition payments, in addition to homeownership expenses, such as maintenance and insurance, will help to determine the ideal offer price for you.
Skipping the inspection process
In competitive markets, skipping the home inspection or shortening the closing period may be tempting. However, the home inspection is one of the most critical parts of the homebuying process, as it can protect you from any significant issues the home may have. When these issues are discovered during the inspection process, either the seller will cover the cost of the repairs, or you, as the buyer, can decide to walk away from the deal.
Making large purchases
Until you’ve signed the closing papers and the home is officially yours, avoid making large purchases, such as a car, furniture, or a vacation. These larger ticket items can impact your credit score and available credit, affecting the mortgage loan you initially qualified for and ultimately impacting the home sale.
Cosigning a loan
Cosigning a loan can be a red flag for a borrower. You’re signing that you will be responsible for the other person’s debt. The lender may see that number and determine it’s too high, coupled with the mortgage’s principal and interest amount.