Do's and Don'ts of Buying a Home
1. Don’t use your credit card(s) to buy things for your home before you close. Don’t buy large items on your credit cards either. In other words, absolutely no excessive spending whatsoever. We can’t stress this enough.
2. Don’t buy a vehicle even if you are paying cash versus taking out a loan. Don’t do either. Most home loans close within 30-45 days. Patience is a virtue. Wait until you are in your new home.
3. Don’t quit your job or change jobs and go into a new field.
4. Do pay all your credit cards and bills on time ALWAYS.
5. Don’t open new revolving credit cards (even if the sales person offers you a 20% discount on your current purchase. Say no until you close.).
6. Do keep a positive balance in all of your checking and savings accounts.
7. Do keep your money right where it is. Changing banks or moving money back and forth will require explanation, which is just more paperwork for you and your lender.
8. Don’t make out-of-the-ordinary large deposits. If you must, be prepared to provide a clear paper trail from where and why. Discuss with your lender prior to any such deposits.
9. Don’t lie on your loan application…because it will be caught. Don’t omit information either. This is the same as lying!
10. Don’t co-sign a loan for anyone no matter how much you love them or how many times they promise to pay it back. (This is a great rule whether you are buying a home or not.)
11. Don’t make sudden changes in your spending habits or income.
12. Do provide any documentation your loan originator asks for in a timely manner. Although it may seem like you are handing over everything but your DNA, keep in mind that you are asking complete strangers to trust you with thousands (if not hundreds of thousands) of their dollars. Wouldn’t you want to know who you were getting into a contract with?
13. Don’t just get pre-qualified. Get pre-approved. Pre-Qualification is a “yes, but we still have to verify everything you’ve told us.” Pre-Approval is a full underwrite which means the lender can say, with confidence, you can afford a home within a price range stated. This is a great negotiation tool when house hunting. Sellers like to know they aren’t losing out on potential buyers or that their time is being wasted while you are finding out if you can afford the home.
14. Do factor in your lifestyle. A lender will give you a range that includes the top end of how much home you can afford. That number is based on your current expenses and not the future. A five-bedroom house requires more heating, cooling (and cleaning!). If it is just you and your dog…it might not make sense. Never forget that what a lender may tell you that you can afford isn’t what you feel comfortable with or can afford.
15. Do some research on your own – know the area(s) you want to be in and what home prices are at this time.
16. Do create a checklist of must haves (i.e., 4 bedrooms, attached garage, 2 baths, etc.) and a wish list so that you are only looking at homes that meet your expectations.
17. Do think about the future. Consider what you want today and for the next 5 years. The average person stays in a home 7 – 10 years. If you are confident this is a starter home, see if your lender can approve you for a shorter-term (lower interest rate) loan. Or if this is your forever home, ask for loan options that help you maximize principal verses interest rate payments.
18. Do relax. You are with the right lender and Realtor (Amy Brock). Trust them and give them what they need to get you approved. You control a lot of the timing. If documentation is required or signatures are needed, get it to your lender and/or your Realtor as soon as possible.
19. Do keep your loan officer’s phone number. They are a great source when you want to ask questions about financing, buying a second home, or a new home in the future.
20. Do get excited that you’ve found the best Realtor in town to assist you in making your dream of owning your own home a reality. In other words, you are in GREAT hands.