Hey everyone, Matt here, your go-to Mortgage Guy. Today, let's dive into the oft-overlooked pitfalls in the home buying process.
The first big no-no when purchasing a mortgage? Not getting pre-approved. You'd be shocked by the number of folks who plunge into house hunting before determining what they can feasibly afford. Don't be one of them!
Seeking pre-approval helps you figure out your actual budget. You'll know your potential monthly payments and what homes are realistically in your price range. It also spares you the heartbreak of falling for that dream $600,000 house when you can only afford half that. Remember, first things first – get pre-approved!
Tempted to jazz up your new house with a spanking new fridge, washer, or dryer? Put that credit card back in your wallet! New debt can jeopardize your mortgage. If your bank sees your credit pulled, it signals new debt. This adds to your debt-to-income ratio, something lenders scrutinize right before closing. It's not wrong to want new things for your home. Just don’t acquire new debt when
you're under contract. Tread carefully; this mistake could cost you your dream house.
Knowledge is power, especially in real estate. Do your homework. Know the neighborhood in which you want to settle down. Sometimes, it's not just about the house but its location. Research the potential resale value, too. Quick example - mobile homes typically have lower upfront costs and are relatively easier to maintain. However, they tend not to appreciate in value and take longer to sell due to their tricky financing.
Lastly, and most importantly, stick to your budget. Plan what you can afford. Setting a budget helps prevent future financial distress. Be cautious, there’s nothing worse than becoming house-poor and setting oneself up for a financial downfall. Plan and stick to the said plan.
Those, folks, are the major points to note when you're in the market for a new house. As your trusted Mortgage guy, I hope you find these tips beneficial. Stay tuned for our next chat. Until then, happy house hunting!
