Common Home Buying Mistakes
Avoid new buyer pitfalls when applying for a first-time mortgage.
You’re excited, scared and ready to buy that house, but not really sure, all at the same time. Sound familiar? Home buying is often an emotional choice, as is any large purchase. So chin up, smile, take a breath and call Walden Saving Bank so you can proceed with your head and your heart.
The subject property is not in acceptable condition: Unless you are obtaining a renovation loan, the subject property must be in marketable condition. Home improvement projects and repairs must be completed prior to closing; preferably prior to the appraisal being completed.
The borrower fails to provide acceptable documentation in a timely manner: In order to close in a timely manner, and within the rate lock period, requested documentation must be submitted as soon as possible. Often documentation is submitted that doesn’t meet the requirements. For instance, all pages of bank statements must be submitted, and all large deposits must be documented with a letter of explanation and evidence of source of funds.
The borrower makes large purchases using credit prior to closing: Often a credit report will be re-verified prior to closing. Be careful not to make purchases on credit between the time of application and closing. New obligations may affect your ability to qualify for the mortgage.
The borrower chooses a lender based solely on interest rate: Many factors should be considered beyond interest rates. For example, closing costs and rate lock period should be compared. Additionally, who will be servicing the loan should be taken into consideration and the ease of communicating with them.
The borrower fails to obtain a pre-qualification: A pre-qualification will often disclose any potential problems and enable you to make corrections prior to application; therefore, increasing the probability of a positive determination.