Hidden Mistakes To Avoid When Shopping For A House

January 18, 2019

Dreamstime

Most home buyers know not to take out a bunch of new debt, quit their job, or ignore their bill due dates when applying for a mortgage. But there are other factors not as commonly known that can cause heartache when house shopping.  Here are some expert tips on what not to do as you start the process. Don't wait until the last minute to budget or get organized. It's not about how much house the bank will afford you—it's about how much house you can afford now and in the future. So think about where your life is headed and what you want to accomplish along the way. This way, when you meet with your mortgage lender, you're prepared to have a conversation about how much you would like to put towards buying a home. If you're seriously thinking about buying your first home in the next year or so, now is the time to add some extra padding to your bank account. There is more than just having cash for a down payment. Home inspections, an appraisal closing costs and the physical act of moving or buying new furniture will add thousands of dollars you may not be preparing for, so make sure to save as much as possible and perhaps cutting down Starbucks to just once per week instead of daily. While it's a good idea not to apply for new credit (this will drop your score), it's also a bad idea to close lines of credit or have high balances on your card.  Besides your credit score, credit utilization, or your balances compared to their limits, all play into your mortgage interest rate. Keeping your balanes below 3% of your availalbe credit will give you the best chances of getting a low interest rate. Finally common advice for finding a perfect house is to look at a lot of them. Same goes for assembling your real estate team—but that's often an overlooked piece of advice. Use the time before you're ready to buy to interview real estate agents, mortgage professionals, attorneys, inspectors.

SOURCE: Apartment Therapy

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