Moreno Valley Homes for Sale and 6 Things NOT To Do

6 Things NOT To Do When Buying for the First Time

From the mortgage application to final closing, there are so many steps to the real estate buying process that it can be easy to make mistakes or errors. Because I work with dozens of first-time homebuyers and the Moreno Valley real estate market I want to be sure that my future clients understand the process as well as some of the most common mistakes the first time homebuyers make. It can be genuinely heartbreaking to get to the closing table and realize that the buyers made some financial error a week or two prior which has now caused the real estate deal to fall apart. This can be devastating and emotionally heartbreaking.

Here are six things not to do during the home buying process.

#1 – Applying for a mortgage and then apply for other loans and lines of credit.

Once you apply for a mortgage you should not try to take out any more credit or loans until the deal closes. Any major financial moves after you have been approved for a home loan can seriously affect your mortgage rate or even the ability to get the loan at all. It can be very easy for first-time home buyers to get wrapped up in owning a new home. They often times go out and start applying for credit at furniture stores or even max out their credit cards on new appliances and furnishings. The problem with this is that by the time final financing goes through you may have a different credit score affecting your interest rate or you may not even be able to afford the amount that you originally started with. It’s best to hold off on all major financing decisions until after you own the home.

#2 – Quitting your job or losing it all together.

Just as with financing, any type of income status change can drastically affect your ability to afford a home. If you lose your job, quit your job or change major status can negatively affect your ability to get a loan or your interest rate. However, if you simply are promoted within the same industry and the same company this should not affect your interest rate. Plus, if you now are earning more money this could actually lower your interest rate due to the fact that you may be able to make a higher down payment.

#3 – Buying anything major, even if not on credit.

As I said before, applying for any other loans or credit is not a good idea but even if you have the cash it’s not wise to make large purchases before your transaction has closed. Even if you have $10,000 in the bank but during the time that you apply for a home loan and the closing you use that money to purchase a vehicle, the bank now sees that you have $10,000 less in assets and this may negatively affect your interest rate. You probably will not lose the home loan altogether but it could affect how much you pay at closing and how much your interest rate is over time.

#4 – Not understanding property taxes, homeowners insurance and the general costs of owning a home.

Too often many home buyers don’t understand that it’s more than simply a mortgage payment when you become a homeowner. Not only will your monthly payment include your principal mortgage interest you may also include property tax and homeowners insurance in that monthly payment. Many first-time buyers find that this is a very easy way to keep everything in one payment. However, this could add several hundred dollars to your monthly payment so you’ll need to consider that when budgeting. Plus, being a homeowner means you can no longer call your landlord if an appliance breaks or your roof springs a leak. Pay close attention to the inspector and get a good sense of what things will cost in the future and how much life each appliance may have left. It’s best to set up a reserve account so that you have some money set aside when a major appliance breaks down or you need to replace the roof, siding, or other major household material.

#5 – Letting your emotions get the best of you.

Too many first-time homebuyers let their emotions get in the way of logically purchasing a home. Yes, it can be very exciting to purchase a home and set it up the way you really want it, but, don’t let those emotions get in the way of logically buying the right home. Many first-time buyers want to make their home their own too fast and end up taking on more than they can handle. Buyers assume that a home improvement will pay for itself by increasing the home’s value but that’s not always the case. Buyers need to exhibit patience and make small changes over time to really build the home that they love.

#6 – Let bills and loan payments lapse.

Just as with finance, credit and job change, you don’t want to make sure that you let any of your bills, especially loans and credit cards, fall behind on the payment. This again can negatively affect your interest rate and perhaps your loan program in general. Keep up with all of your bills, pay on time, and you’ll be glad you did when there are no hiccups or problems at closing.
I want all of my buyers to be excited, happy and prepared when it comes to purchasing and owning a home. If you’re ready to get started please feel free to give me a call 951-259-0764

 If you’re not sure where to start I would be happy to get you set up with the lender in the area and offer tips and suggestions to get started on the home buying process.