Home-buying Mistakes to watch

Spring is here and the home buying market is gearing up. Now if your a first time home buyer or an experience veteran you will want to read this post. I listed home-buying mistakes that most people even the most seasoned home buyer might commit.

Find a home without pre-qualification and pre-approval:

There are buyers who start shopping for a home without getting pre-qualified and pre-approved. If you get pre-qualified with a broker or lender before seeking a home, you can convince the seller of your ability of getting a mortgage loan. A letter from the lender or broker to the seller can further improve your chances of getting the home of your choice. Just because you qualified for a mortgage just a few months ago, things have changed. You need to be sure you will still qualify.

Buying a home without home inspection:

Home inspection helps to find out whether there is scope for repair in the property. The reports of such inspection help you negotiate with the seller to reduce costs. I often hear that "I can't afford to get an inspection." If that is the case you should not be buying a home in the first place.

Signing documents without checking:

Buyers often sign documents without reading them. These documents are standard forms and are available for review. But you may not be able to read them all at closing. So you should go through them prior to closing and avoid difficult situations in mortgage and home buying transactions.

Not getting a Good Faith Estimate:

You should receive the GFE within 3 business days of applying for the loan. This should list all costs and fees associated with your mortgage. So, if you aren't getting one from the broker, request a copy of it. Make sure that you get a cost guarantee. While some third party costs may vary banker/broker fees should not.

The rate-lock is not made in writing:

Get a written agreement of the rate-lock offered by your broker. This agreement includes the interest rate, period of rate-lock and other details of the loan program.

Lock in at low interest rates:

Majority of buyers wait for market rates to decrease before going for a rate lock. But the reverse may happen. The interest rates may increase and you may have to pay more. Make sure that your mortgage broker has all of your contact numbers. We need to be able to get hold of you when markets change. This will help you to lock in at a lower rate.

Terminating the lease on the date of closing:

You may ask your landlord to terminate the lease just on the day of closing. But this can lead you into trouble if the closing is delayed by a week or so. The lease should be terminated a week after the closing so that you can avoid further problems.

Shopping for home insurance just before closing:

There are buyers who look out for homeowner insurance policies just before the closing. But they fail to shop around in the last minute. It is better to search for the best policy as soon as a lender approves your loan.

Applying Obtaining new credit after making initial application:

Do not make any additional credit inquiries from the time of your mortgage application until closing. The bank may (and often does) re-pull credit at closing to be sure that you have not secured any new debt.

These along with many other things is why it is important to deal with a professional mortgage company. You choice in Indiana is Sagamore Home Mortgage. I am here to help folks just like yourself with all of your mortgage needs. Please let me know what questions you have.

Tony Grego
Indiana Mortgage Company

 

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