With their limited experience, homebuyers make mistakes that can cost them time, money, and even cause their loan to be denied. Learn from the mistakes of others and avoid the following:
- Don’t apply for any credit between the time you’ve applied for your loan and closing. Don’t buy a car, furniture, or get a new credit card.
- Don’t keep your down payment money in a place where the funds can’t be verified, like a safety deposit box. If you are borrowing money for your down payment, you will be required to provide a “gift letter” from the person giving you the money.
- It’s smart to be selective about whom you choose to represent you to buy a house. After you’ve made your choice, it’s dumb to insult your agent by accusing them of trying to sell you a higher priced home or of taking a kickback from a mortgage company, title company, or inspector. RESPA prohibits kickbacks and no decent career agent is going to risk their license for a couple hundred dollars or a Starbucks gift card. If you aren’t sure that you can trust your agent to work on your behalf, don’t hire them in the first place.
- Don’t fail to read your loan documents and your purchase contract. Ask questions if you don’t understand the terms. It’s ultimately your responsibility to ensure you know and understand the terms of your loan. New lender regulations have made everything transparent, but you MUST read your paperwork.
- Check your credit and get pre-approved BEFORE you start shopping for a home. If there are any question marks about your qualifications, resolve those issues first, then shop.
- Don’t buy with your heart and not your head. Don’t fall in love with anything until the house checks out.