The road to owning that dream house is not an easy one. Oftentimes, you will encounter a number of rough patches. This is due, in part, to the different stages that a prospective buyer goes through. However when one has a full understanding of what is involved, navigating through each stage of homeownership becomes a lot easier.
Have you been pre-approved for a home loan? If so, congratulations. There are various benefits to getting a pre-approval letter from a bank or a private lender. For one, you’ll be able to know your home value limits. It streamlines your search for that property to purchase.
Still, it doesn’t necessarily mean that everything’s in the bag. Some mistakes can mean the difference between getting that FHA loanor not . To avoid this, let us examine the potential pitfalls one may encounter at this point.
1. Changes in income
When it comes to income, the amount you qualified for is normally based on your two-year employment history. If you switch jobs, you will then be required to document thirty days or more with your new employer before getting approval for the home loan.
2. Late or missed payments
Few things will have as serious or heavy an impact on your credit score than having a late or missed payment. Even if you’re pre-approved, a negative change in your credit score could still mean losing your chances of getting the actual loan approval.
3. Getting distracted by cosmetics
A fresh coat of paint and a newly tiled kitchen floor are great. However, if the house that’s also for sale next door is priced less, chances are you could get a better deal by buying that one and then doing the improvements yourself.
4. Failing to plan for additional expenses
Like most people, you’ll likely be writing up a list of both needs and wants for your new home. It’s important to stick to those that are really necessary and have enough money to pay for them.
5. Not keeping your lender in the loop
See to it that you notify your lender when the time comes that you’re ready to make that final offer. Review what the payment will look like (based on the real scenario) with your loan officer.
6. Falling for the first
Resist the temptation to make an offeron the first home you like. Take your time. Shop around for other properties within the area you want to move into. Remember, this is the biggest financial decision you’ll ever make. It’s always good to have more choices that you can weigh upon.
Learn from the mistakes above. Shop around for a home that offers the best value. Avoid situations that could jeopardize your excellent financial standing. Finally, keep your loan officer updated so you can be guided in the property financing process.
Justin McHood is America's Mortgage Commentator and has been providing expert mortgage analysis for over 10 years.
