In parts one and two of this multi-part blog series, we’ve gone over some of the most common errors to avoid if you’re a first-time homebuyer entering the market. While there are several such areas to steer clear of, you also have resources available to you for assistance, including your loan officer and realtor.
At Altius Mortgage and our partners at Mortgage Ogden, we’re proud to offer several loan programs that are ideal for first-time homebuyers, plus expertise on how to navigate the market if you’re entering it for the first time. In today’s final entry into our series, we’ll go over some of the errors we sometimes see later in the process, plus what you should do to avoid them and ensure you’re in a great position moving forward with your new home.
Other Credit Applications
It’s vital to be aware of the timing gaps between when you apply for your mortgage and when the home sale will actually be closed, which will be a few weeks in most cases. And during this in-between period, we strongly recommend taking on any other kind of credit application, whether for a car loan, furniture purchases or any other reason.
This is because your credit is still a deciding factor during this period, where your lender will be evaluating your credit score, debt-to-income ratio and your income to determine your creditworthiness. If you apply for other forms of credit that require hard inquiries, these will lower your credit score and may increase your debt-to-income ratio, neither of which will look good to your lender. As a result, your mortgage interest rate or fees on the mortgage might be changed, or your closing could be delayed.
Shopping Too Early
While we know the home shopping part of this process is what you’re really looking forward to, you can’t be impatient here. If you’re evaluating or even visiting properties before being at least pre-qualified or pre-approved for a mortgage, you’ll be doing so blind – without a true idea of your purchasing power or the ability to make a competitive offer. Instead, speak to your loan officer about the steps for being pre-approved.
Improper Cost Calculations
Finally, one mistake some first-timers make is miscalculating various long-term expenses as they close on their home. In some cases, these refer to various homeownership costs, including utilities, homeowners’ insurance and related expenses. In others, they’ll refer to repair or renovation needs that are required in the home, including some that will present safety or long-term property risks if they aren’t remedied.
For more on how to avoid common pitfalls among first-time homebuyers, or to learn about any of our home loan services or mortgage rates, speak to the staff at Altius Mortgage today.