Things You Shouldn’t Do When Buying a Home

The last thing in the world you would ever want is to spend a bunch of time searching for a home, finding that perfect place and then not being approved for your mortgage. There are also many common mistakes homebuyers make that could make the process much more painful than it has to be.

We’re writing this article because we know how stressful it can be to buy a house. In order to make your process easier, we are going to cover the 9 things you shouldn’t do when buying a home.

1) Don’t overestimate your budget.

budgetEver heard the expression “House poor“? Many homebuyers overestimate what they can actually afford and end up with very little wiggle room financially. Before jumping into buying, make sure you have a realistic idea of the yearly costs involved with owning a home.

Remember, there is your mortgage, property taxes, utilities, insurance and repairs. All of this before you even think about making upgrades. Factor in all the costs and leave yourself some room.

 

2) Don’t let your emotions run wild.

decisionBuying a home is one of the biggest decisions of your life. It’s normal to be excited and fall in love with a home. However, try to keep a level head. Falling in love with a home can cloud your judgement or end in disappointment. This can happen if unforeseen issues are exposed in the inspection or if someone puts in an offer before you.

If you don’t find a home… don’t get discouraged. Home searching can be a lengthy process. It will be worth it when you find the winner.

 

3) Don’t talk to sellers about plans for the house.

buyingAs much as you are excited to get in and put your personal touch on the home, it’s best to keep this to yourself. Sometimes home buyers meet and get to know the home owners. This is fine, but remember that the current owner will have an emotional attachment to the property.

It’s best not to make them feel like you’re going to come in and completely change the place. If you make conversation with the owners, just keep the conversation light.

 

4) Don’t make any large purchases.

mortageWhen applying for a mortgage, every financial transaction plays a part. It is recommended that you do not make any large purchases like furniture or a car prior to applying. This is because banks want to see that you have a smooth financial history.

 

 

 

5) Don’t withdraw or deposit a lot of cash.

moneyGoing further with your financial history, cash withdraws and deposits also play a part in your mortgage approval rate. Large quantities of cash going in or out of your accounts signals a warning sign that you do not have stability. Avoid any sporadic withdraws or deposits of large sums of cash.

 

 

 

6) Don’t apply for more credit.

creditcardThe amount you are approved for on your mortgage comes down to your capital. How much money do you have at your disposal? Applying for extra credit increases your debt. This extra debt decreases the amount you will be approved for on a mortgage.

 

 

 

7) Don’t co-sign a loan.

loanWhile a loan may not technically be yours – it will still equally count towards your overall debt. Co-signing a loan can have an impact on not only the amount of your mortgage, but approval rate in general. Avoid co-signing any loans until you have purchased your home.

 

 

 

8) Don’t finance a car or furniture.

carloanAs financing is again a loan, it is therefore debt. Stay away from financing a car or furniture for the above mortgage approval reasons.

 

 

 

 

 

9) Don’t switch or leave your job.

jobFinancial stability is one of the most important factors considered when a bank is approving your mortgage. The key to financial stability is having a dependable income. If you switch or leave your job, often or before applying for a mortgage, this may signal red flags.

If you are thinking about a move, hang tight with your job until after your mortgage is approved.

 

 

In Conclusion

There are many important things to consider when purchasing a home. It is one of the biggest decisions of your life.

In order to ensure that you get the house you want, when you want it, you need to understand and follow those above tips. Doing so will increase your chances of finding that perfect home and getting it. Remember that financials are very important when it comes time to apply for a mortgage. Make that your priority.

Also keep in mind the emotional aspects of purchasing a home and try to stay cool. It can be a draining process, but it will be worth it when you get the keys to the castle!

Are you looking for a home in the (INSERT COMMUNITY) area? Give me a call. I’d love to help you find a home (and make sure you make none of the above mistakes in the process!)

About the Author
Jose Peralta
Since 2006 I have been a leading Realtor in the Los Angeles area. Having closed hundreds of transactions, and winning various awards, I am honored to as licensed Associate Broker be in the Re/Max “Hall Of Fame” for sales production. Through my career I have built deep relationships within the real estate community as well as highly successful business’ and investment groups. I have vast experience in traditional real estate sales, investments, flip properties, and other aspects of real estate As a personal touch agent with extensive market knowledge and complete devotion to my clients my success is based almost exclusively on positive referrals.

Specialties Include: negotiating contracts, providing detailed analysis of specific market areas, sales and marketing, relationship building, flipping properties and real estate investment strategies.

While going to college I began working for a company in Los Angeles that produced ink and toner cartridges. I began there in purchasing and worked my way up to manage and lead the production department. I oversaw all of the purchasing for the company, oversaw the inventory and scheduled production lines according to sales. After working with the company for 3 years I moved down to San Diego and worked for a sales company within the same industry as their international sales manager. There I helped build new relationships with various people in foreign markets. I specialized in creating collection programs with companies in Spain, South America, Mexico and Central America. This position gave me time to craft my sales skills and learn how to apply them. Shortly after that I became part of a start up team and created my own company. We worked hard as a start up and within a few years built a profitable multi-million dollar ink and toner cartridge business. The company focused on collecting empty ink and toner cartridges from other countries. We also created fundraising programs with local schools throughout the United States. We helped local schools in various parts of the country to organize their students and staff to bring in recyclable ink cartridges, toner cartridge and cell phones and receive a donation for them. We also implemented the program with various Chambers of Commerce. The company was later successfully merged and I stayed on to consult for some time. During this time I started to get a passion for real estate. I began with investing in some duplex properties and decided I wanted to learn more and get more involved. I started working at Re/Max and was mentored by an agent that had over 15 years of experience. Under her mentorship I came to appreciate and love the ability to help clients with their real estate needs. I started a team and have always stayed focused on putting my client’s needs first. Real estate can be intimidating even for a seasoned buyer and seller. I pride myself in working closely with my clients to try to make the process as seamless as possible. I am responsible for building and maintain relationships with potential buyers, sellers and investors. Although I started in a down market I have seen nothing but growth within our team.