When buying a Westfield area home, knowing what not to do is just as important as knowing what you should do. For example, ignore home buying myths (like you cannot have any debt whatsoever and your credit must be excellent or forget about ever being approved for a loan). Fortunately, lenders offer several different loan options for buyers to choose from. And avoid these common mistakes home buyers make to help ensure a smooth transaction.
Common Mistakes Home Buyers Make
Waiting to Hire an Agent
Hiring a qualified Westfield REALTOR® that you trust should be one of the very first steps you take when buying a home. Feel free to go online to see what is available in the area. But make sure an agent accompanies you to any viewings. Last year, many buyers and sellers opted for virtual viewings instead of in-person tours. Sometimes, that meant allowing your representative to act as your eyes and ears at the property while you Facetimed with them. So, you want to make sure you hire someone you trust. And make sure you are honest with your agent about your budget so that they keep you focused only on houses that fit those parameters.
Meeting With Just One Lender
Your finances need to be in order before you start househunting in the Westfield real estate market. Unfortunately, one of the most common mistakes home buyers make is to meet with just one lender. To be pre-approved for a loan, you fill out a lot of paperwork. The idea of doing that multiple times can be a bit daunting. However, you might miss out on a great rate if you stick to just one lender.
Start with your bank’s mortgage division first. Then, ask your friends, family, neighbors, and co-workers for a recommendation. Finally, your agent may be able to recommend a lender. Meet with at least three different lenders, obtain quotes from each, and then look over all the information before deciding which one to use. If that sounds too overwhelming, consider working with a mortgage broker. They work on your behalf to seek out the best offers from various lenders in the area. Think of them like Google…but better.
Waiting for the “Perfect House”
I hate to break it to you but the “perfect house” does not exist. Even when you build from the ground up, you may end up having to make compromises. Avoid this common mistake home buyers make by creating a concrete list of “musts” and “wants”. You must have at least three bedrooms and an office. On the other hand, you want a pool but it is not a dealbreaker if there is not one. Let your agent know your specifications so that they only show you the properties that fit your requirements.
Forgetting About Closing Costs
Many buyers focus on the downpayment. Unfortunately, another one of the common mistakes home buyers make is to forget about the closing costs. These can run anywhere from 2% to 7% of the purchase price. In New Jersey, buyers usually pay between 2% to 3%. After the seller accepts your offer, your lender should provide you with a closing cost estimate to avoid any surprises.
Making Major Purchases Before Closing
Yes, your lender pre-approved you for your loan before you started looking at Westfield houses. However, towards the end of escrow, they run your credit one more time to make sure that nothing has changed since they initially approved you. Yet another one of the common mistakes home buyers make is to purchase big-ticket items before their final close. That includes new furniture or buying a car. All of this affects both your debt-to-income ratio and your credit score. If either one (or both) change, you run the risk of a higher interest rate on your mortgage loan. Or, even worse, the lender may decline your loan altogether. Hold off on making any major purchases or even opening up new lines of credit until after you sign on the dotted line and receive the keys to your new place.
Scott Gleason, CRS at Coldwell Banker Realty – East, NJ Luxury Homes