When you talk to a lender about pre-approval, you’re going to go through a full range of emotions, including anxiety over whether you should buy a home or stay put. Here are five mistakes to avoid making prior to closing escrow on your house.
1. Obsessing over a purchase price
A house’s purchase price is crucial, but it’s hardly all there is. The biggest factor behind home buying is actually the mortgage. These payments are the true drivers of long-term affordability. In most cases, every $10,000 in purchase price translates to about $100 in monthly mortgage costs.
2. Deciding that you need to increase your credit score after pre-approval
Your lender can give you advice on how to increase your borrowing power or lower your monthly payment. One of the biggest mistakes new homeowners make is believing that they must increase their credit score to get a lower interest rate, even when the market works against that. Purchasing a home makes your credit score go up, and you can always refinance if rates drop in the future.
3. Having unrealistic expectations
In Sonoma County, California, purchasing a 10-year-old home on three acres of land for $500,000 is simply unrealistic. New homeowners can certainly fantasize about a dream home, but they should also be mindful of what their local market supports. Talking to a real estate agent can help.
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4. Not accepting that your first home might be a stepping stone
Homeowners should accept that the house they’re buying may not be their last. They also shouldn’t be afraid to purchase a smaller living space on their way to their dream home. As an example, some homeowners refuse to buy a condo because they have their heart set on a single-family home. However, buying a condo first can help homeowners build the equity and credit that they need to purchase a house later on.
5. Telling yourself that you can’t get a mortgage
Remember that not all mortgage lenders look at mortgages the same way, and that denial at one lender doesn’t automatically mean ineligibility at another. However, consumers should take care to find a lender who will work for them. Prompt communication, responsiveness and competitive rates are all signs of an effective lender.
This article originally appeared on SonomaCountyMortgages.com and was syndicated by MediaFeed.org.
Featured Image Credit: DepositPhotos.com.