Don’t go into buying a house without reading this guide! These 5 tips will save you the stress of common home-buying headaches.
Buying your first home is super exciting! You might want to rush through every step, ready to grab those keys and begin moving into your new house, making it your own.
Before you start picking out paint colors, read this guide. There are lots of things that I’ve learned through my first and second home buying experience. During our recent experience, the lender almost cost us our home. I go in depth below but I want you to have these key take aways from my recent experience to save you from a headache.
Tips To Avoid Home-Buying Mistakes
Follow these tips and you can have smooth sailing with your home buying experience.
#1 Get Pre-Approved Before House Shopping
You need to know what your budget is before you start falling in love with a home that you’ll never be able to pay for. Talk to your bank or mortgage company and find out the highest amount of a loan you will be able to get.
If you are working with a realtor, they will encourage you to do this step. Listen to them and do this before you look at a single home.
#2 Try to Have 20% Down
Save up 20% of your house cost so that you can put that down. If you do, you will be able to avoid paying for private mortgage insurance (PMI).
PMI insures the lender for anyone that doesn’t pay 20% or more down and protects them in case the lender defaults.
That downpayment will save you so much money. It also makes you look like a more reliable lender.
#3 Save Extra For Closing Costs and Fees
Think that a 20% downpayment is all you need? Think again! Prepare for the closing costs and fees. Some people think the seller should pay for all of it, but that hardly ever happens.
Typical closing costs range from 2% to 5% of the total cost of the house.
That means that for a $200,000 home, closing costs could be anywhere from $4,000 to $10,000.
#4 Shop Around For Lenders Quickly
It’s very important to shop around for lenders within the 14-day window when your credit is initially pulled. It hurts your credit score if you have too many credit checks on it.
This is a little-known secret. All credit inquiries that occur in a 14-day window only impact your credit scores as a single credit application event.
When you are shopping for a house, you need to over-protect your credit score. Do everything you can to make sure it doesn’t go down a single point.
#5 Be Prepared To Walk Away If Necessary
This is one of the most important tips on the list. On social media, people will tell you “ Oh my home buying process was quick and easy”. No ma’am, not every time. You might find the perfect home that feels like a dream come true – right in your price range and has everything you ever wanted. If it becomes too stressful and just isn’t working out, it is ok to walk away and keep looking. Luckily, everything worked out last minute for us but I was prepared to find peace in getting another home.
Due to our lender, I almost lost all hope. So we were pre approved for our loan and all necessary documents given to our Mortgage broker 3 months ago. Within weeks we chose a home, had our offer accepted and everything sent to underwriting. Our close date was set and we prepared to move out of our San Antonio home. The underwriters even sent our Clear To Close letter a week early. That’s when things went left. The night before closing day, our broker calls to tell us the Lender is not ready for us to close, the letter was preliminary but they still had to check off with Senior underwriters.
Then why send us a clear to close letter? I don’t know, ask Orion
They took weeks in between asking for even more conditions, such as my diploma and transcript from grad school. Say, what now? I still wonder why that was even needed. As you can imagine, all this delay had the Seller pretty frustrated. Up to the point of putting the house back on the market for showings. On top of all this, we had already agreed to move out of our San Antonio home so guess who felt homeless for a while. This girl!
What grinds my gears is we almost lost our house, not from anything disqualifying us, not for a lack of funds, just the painfully slow manner that our lender went about things. I am so thankful for our realtor, @ChikaTheRealtor, for keeping us in the loop and fighting for us.
At the end of the day, It took two grueling months for us to close on our house, and now it’s time to renovate! So stay tuned as we take on some big and small renovations!
Prepare For Home-Buying Headaches
Sometimes you really can’t control how a home-buying experience is going to go. Even if you try your hardest, things will come up and surprise you. I want to encourage you to still work hard and do all you can to prepare for the most common ones.
If you follow these tips, you will more than likely to snag the home of your dreams with as little stress as possible!
Thanks for the tip about finding lenders readily when finding homes for sale. I’m thinking about moving to a different city soon in order to live in a less cramped neighborhood. I think that would be for the best if my husband and I plan to start a family soon.