Buying a home is an exciting process. If done following my simple process, you could save time and money and potentially avoid some serious mistakes along the way.
Shopping For Your Home Before Shopping For Your Mortgage
This is often times the easiest thing for home buyers to miss. It is so easy to start viewing homes and make an estimated guess on what you can afford. This is actually the biggest time waster when it comes to home buying.
I always recommend to get pre-approved before looking. Don’t waste one minute of your time shopping for a home that is outside your price range. Not only does it waste your valuable time but it also can be an emotional process if you get attached to property outside your price range. I always advice my clients to start working with me three to six months before they start the home buying process. This will give us time to check your credit and put together a game plan if you need to improve your credit like paying down the right debt and removing possible errors on your credit report.
Make sure you consider ALL your spending habits
When I work with borrowers, we review their credit report and their spending habits, including their disposable income (i.e. hobbies, habits and other items that will affect your bottom line when being lent to). Things such as golfing on weekends, shopping at the outlets, everything comes into play when deciding your mortgage affordability.
You don’t want to eliminate all the fun you have when you are looking to buy a home but I always recommend digging into spending and making decisions on which items will potentially make it more difficult to make your mortgage payments and also which items are important to your quality of life.
Failing to Review Disclosures and Other Important Documents Completely
I am always available to my clients to review documents and disclosures that may seem complicated or confusing to them as it may be their first time in the home buying process. Every time new disclosures are released it is vital that you review them in depth and feel comfortable with any changes that may be taking place. It literally can cost you money when you don’t review them completely and see minor changes that will ultimately be brought up at closing but could be better understood earlier the process.
Since 2015 there are two primary documents you want to make sure you pay close attention to.
- Loan Estimate
What to look for:
- The total cost of the loan or the APR.
- Cash to close.
- Loan terms
- Mortgage rate
- Monthly payment
- Closing Disclosure
What to look for:
- Did you receive the Closing Disclosure three days prior to close?
- Does the Closing Disclosure match the loan estimate?
- Are the interest rate and the APR the same?
When I am working with my borrowers it is vital that they understand each step of the process and also avoid making these mistakes. If you are interested in learning more about the mortgage process or are thinking about buying a home and want to make sure you don’t waste your valuable time, give me a call to discuss your mortgage needs.