7 Things You Should Never Do Before Buying A House

When you’re looking for a new place to call home, there are a lot of lessons to be learned by first time home buyers. Here are seven things our home loan team members have identified as things you should avoid when buying a house.

1. Buy a car before speaking with a mortgage loan officer

Buying large personal items on credit can affect your debt to income ratio, or the amount of monthly debt payments that you have relative to your monthly inflow of cash. This is one of the largest determining factors for the amount of home you will qualify for, or if you will qualify at all. Always consult your mortgage professional before making a large purchase on credit.

2. Use cash to pay off debt before speaking with a mortgage loan officer

It may seem like common sense to pay off a debt to improve your credit score. However, that’s not always the case. Sometimes your money can be better used to pay for down payment, closing costs, or just keep in your pocket. Always consult with your mortgage professional before burning through that cash!

3. Put an offer on a house without having a full preapproval

While you can back out of a home purchase in some instances, there is usually a financial risk to doing so. Deposits on the home may not be refunded and you may have sunk cost in inspections and appraisals. Always make sure to have a full preapproval before you offer on a home so you and the seller are confident the deal will go through without a hitch!

4. Wait until the last minute to get a preapproval

Getting back to the last point, most sellers will require a preapproval letter with their offer to ensure they are working with a qualified buyer. In today’s competitive market, if the seller has to wait for you to contact a mortgage company to obtain a preapproval letter, they may move on and accept another offer. Always be prepared before you look at houses with your preapproval.

5. Assume that foreclosures are the best deal

There is a common misconception that a foreclosure is a great deal. Just like any other home, there are foreclosures that are good deals and foreclosures that are bad deals. Work with a licensed real estate agent who has access to new construction, existing homes, and foreclosures so they can point out the pros and cons of each.

6. Assume that forgoing a buyer’s agent will save you money

Buyer’s agents work for the buyer but are paid by the seller. Often times you will hear of someone enticing you with a “deal” if you don’t use a realtor to represent your purchase. Often times this doesn’t work out in the buyer’s best interest. Always vet out your options to be represented in a home purchase transaction.

7. Change jobs before speaking with your mortgage loan officer

Back to that debt to income ratio from number 1, nothing is a bigger killer of a deal than having a change of income that can’t be counted towards a home loan. Always make sure to consult with your loan contact about how changing jobs will affect your approvability before making a decision.