Saying goodbye to your current home is a pretty emotional experience. Of course, any sadness that you feel is often negated once you have moved into a new home! However, if you have made a bunch of mistakes during the process, then you might find yourself deeply unsatisfied. Make sure you avoid these home-hunting mistakes!
Many people out there see home ownership as the ultimate symbol of achievement. The idea that those who do not end up owning a home have not really “made it” in life does seem to be a strong one. Not only that, but a lot of people seem to paint renting as something that you need to stop doing as soon as possible for very clear-headed financial reasons. After all, you are paying loads of money every month towards something that you are never actually going to own. Surely, that is the equivalent of throwing money away in a world where you can put those monthly payments towards full ownership of a property.
Well, renting is not always the worst idea when it comes down to it. You may have seen a bunch of articles that explain why you should buy a home instead of renting one. However, there is a bunch of articles out there saying just the opposite; that renting is actually the smart option versus buying. If the reason you are looking to buy a home is that you think you are not very successful if you do not, or because you think it does not make financial sense to rent, then you may want to slow down. Investigate both sides of the issue and see what works best for your own circumstances. At the end of the day, dismissing renting outright might be the biggest mistake you can make if you are looking for somewhere new to live!
Looking for homes before securing a loan
It seems to make sense, right? If you want to buy a home, then you should just get out there and start looking at new homes. In fact, many people already do a little casual looking around at new homes before they have even fully committed to their idea of purchasing one. How else are you supposed to know if the right home for you is out there? How else are you supposed to know how much money you need to raise? While all of this may make a lot of sense on the surface, looking for a home before you have approval for a housing loan can actually be a big mistake. Finding out a rough price range beforehand might seem useful, but there are problems with this path.
Getting approval for a loan before you actually start shopping around for houses and making offers is called preapproval and it will work to your advantage in many ways. At the end of the day, it does not matter what the prices of the houses you love the look of are unless you already know how much you can actually borrow. If you have seen an incredible house for $300,000, but then find out that you can only get a loan of $200,000, then what was the worth in finding that property in the first place? You are just going to end up disappointed.
In addition, it is not just disappointment you have to think about. From a practical perspective, it simply does not make sense not to get preapproval. Let us say you can be approved for a $300,000 loan for that home. The odds of that home still being available by the time you’ve gone through the loan approval process is incredibly slim; in fact, the seller may dismiss working with you outright if you’re not actually ready to make an offer. So get preapproved – it is best for pretty much everyone involved!
Not getting a credit check beforehand
This is a mistake that many people make before they apply for any loan. If there is a problem with your credit score, you should not leave it for your prospective lender to discover. It costs you time and money to get that process started; if your request for a loan is rejected, then you’re going to have to spend more money later when you get the loan approval process restarted after solving whatever problem was found in your credit report – which, in itself, can take a lot of time and hassle to correct.
Do not make the mistake of leaving these problems for a lender to discover. Again, it ends up being a waste of time and money. If there are any serious problems with your credit, then you need to find out about them as soon as possible. You are entitled to a free credit report every year; use this to your advantage. Find out how your score is looking; if there are any problems, get them dealt with before you approach a lender about a loan. It is worth remembering that different lenders will have different metrics by which they judge your credit score, so it is always possible that one lender work with you despite you have been rejected by someone else, all based on the same credit report. However, it really is best to negate the chances of rejection to the best of your ability beforehand.
In case, for some odd reason, you were not already aware, then it is worth highlighting that buying a home is going to cost a lot of money. The fact that this is going to be such a hefty investment really needs to steer some of your decisions during this process; for example, you need to make sure that you’re really getting your money’s worth before you start signing anything with a home seller.
Something that an astonishing number of buyers neglect to do is get the property inspected before a purchase is finalized; and if you do not get a property inspected, then you don’t really know if you’re getting your money’s worth. If a seller is refusing to allow for an inspection before purchase, then take your business elsewhere; they should be prepared to allow for such inspections, and the fact that they are making things difficult may be a solid sign that they have something to hide.