Wayne Turner, Broker of Turner Real Estate Group in Mandeville, La and Stephanie Weeks , Mortgage Lender of The Weeks Team in Covington, LA discuss the top 3 mistakes home buyers make when purchasing a home.
The first mistake is not securing financing before writing a contract on a property. Often times home buyers will do a mortgage calculator to determine what price range they feel comfortable with, but that doesn’t factor in escrows and things like PMI (private mortgage insurance). Every property has a different cost for taxes and home owner’s insurances. Some properties are required to have flood insurance, while others aren’t.
Also, without knowing an accurate interest rate figure the note will be off. Not to mention what you’re comfortable paying and what you’re qualified to pay by a mortgage lender could be two different things – it’s important to speak with a lender to make sure you’re qualified to get pre-approved first, before jumping the gun and assuming. A mortgage lender will look at things like your income, tax returns, debt-to-income ratio, credit score, etc to determine if you currently qualify, and if so how much you actually qualify to borrow to purchase a home. That way as you move forward in your home search, you can feel confident and comfortable writing an offer on a home that this home is feasible for you.
Please note that a 620 credit score is what is needed to purchase a home in most cases, which is below the average. So on the flip side many consumers are concerned they won’t qualify thinking their score is too low, and are pleasantly surprised to find out their score is high enough to qualify for a home loan. Regardless it is best to speak with a mortgage lender to know for sure what all your options are.
The second mistake is taking out a line of credit after getting pre-approved. People will open a credit card to buy things like furniture from Rooms-to-Go or appliances for the new home from Lowes, for example. Some people even go out and buy cars! But until you go to closing, you can’t open any new lines of credit as it will affect your financing. Wait till after closing when everything is finalized before doing anything that will change your credit score, debt-to-income ratio, etc.
The third mistake is not really understanding the rate you’re getting. Many people go online to calculate monthly notes trusting online mortgage calculators, not realizing that 99% of the time when you go online the rate is based on 30% down (how many people actually put that down), and a 740+ credit score (when the average score is a 680!) They’re showing you a rate that 95% of people won’t qualify for.
Basically, pull your credit, get approved with a lender, and going forward you can rest assured that you’ve done your due diligence in properly preparing for purchasing a home. For more info call Wayne Turner with Turner Real Estate today at 985-626-1313, and Stephanie Weeks with The Weeks Team at 985-300-5626. You can find them online at www.LocalNorthshoreRealEstate.com and www.WeeksTeam.com.
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