Avoid These Common Mistakes When Searching for a Home
Mistakes are better when you read about those that others have made. Here are a few to consider avoiding:
- Borrower assumes that since most of the required documentation has been given to the lender, loan processing can continue normally. Many times a borrower is unaware the lenders are under strict document guidelines and loans cannot be approved without all the required documentation.
- Borrower hears news reports about interest rates going up or down and tries to anticipate interest rate movement. (By the time the news is announced, the markets have already adjusted and /or changed again. Today the markets are extremely efficient),
- Borrower writes a contract before a professional loan qualification analysts. Quite often a borrower cannot qualify for a loan to purchase the home and the deal is canceled.
- Borrowers shop for a loan exclusively by rates, ignoring other fees, references, reputation, and track record fo the lender. (Junk fees add to the overall cost of a loan and missing a closing date through a botched loan can cost hundreds of dollars. Some have even found themselves without a home when a loan falls through at the last minute. Rates matter very little if the loan cannot be delivered as promised.
- Borrower contracts for more than the loan pre-qualification amount. Upgrades and “just a little more house” can disqualify a borrower.
- Buyers contract for home, apply for a loan then go out and finance a large item; car, vacation etc. that takes them beyond what they can qualify for, consequently losing the loan for the home.
- Buyers try to purchase a home without professional advice. They learn (the hard way) that potential saving is often eaten up in wasted time, mistakes, and poor negotiation.
- Buyers fail to use a “local” lender and opt to use “out of state” lender who is unfamiliar with local laws and customs. Lender fails to meet a deadline or hire an appraiser who is familiar with the housing market. In any event the transaction fails. Lenders do not have a vested interest in getting buyers loan closed. A local lender who has made a career by delivering timely loan commitments will hold themselves accountable, working with all parties to a success end.
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