Mortgage Advice

100% Avoidable Home Buying Hassles

September 28, 2018

We’ve all heard our fair share of home buying horror stories. You may even think of someone you know who had a horrible experience as you’re reading this post.

While there may be a lot of moving parts and multiple people involved throughout the process (real estate agents, inspectors, appraisers, lenders, sellers, etc.), we think buying a house should be an exciting (and enjoyable) experience.

That’s why we’re sharing what you can do to avoid these common (but 100% avoidable) hassles that can cause headaches during the home buying process.

Get Preapproved for a Mortgage

Before you start your search for the perfect home, make sure your lender provides you with a letter of pre-approval, and not a pre-qualification.

Pre-approvals are different from a mortgage prequalification, in that the necessary financial information you provide is documented, verified and validated upfront in order to accurately assess your ability to repay a loan. Getting pre-approved for a mortgage loan will give you the peace of mind of knowing just how much house you can afford and confidence to close the deal.

Before you embark on your home buying journey, it’s important to first prepare all the documentation that will be required throughout the mortgage process. Having everything on hand when you reach out to a lender will make for a faster approval process—an important factor, especially if you’re house hunting in a competitive market.

Know What Documentation is Needed if You’re Using Gift Money

If you’re planning on receiving a monetary gift for the purpose of buying a home, it’s important to talk to your lender about your plans upfront so they can work with you to collect the proper documentation that will be needed during underwriting. After consulting a loan officer to find out what’s needed, you should also consult with the person gifting you the money to ensure they’re comfortable with sharing their information as part of this process.

When applying for a mortgage, you should also keep in mind that home buying gifts can only be obtained through family members or employers. If you’re getting a loan through FHA, you can also receive your gift through a personal friend with whom you have a documented relationship. If your gift comes from someone outside the approved groups, you could be in for an unpleasant surprise.

Know the Home’s Condition

One common home buying hassle, as it relates to the property, is not knowing the condition the house needs to be in to be eligible for financing. Getting a private home inspection makes sure the house you’re planning on buying is truly in its advertised condition and allows the seller to address any flaws that can be fixed or improved upon before sale—lest you offer a lower price.

Eligibility for FHA loans differ from conventional loans when it comes to property condition. For example, applying for a government loan will require a water test–both biological and chemical–on your own dime. That won’t be necessary for a conventional loan.

Some cities also require a certificate of inspection and proof of occupancy at the time of title transfer, and it would be helpful to know whether your targeted neighborhoods demand that of you, so you can be properly prepared.

Budget Properly

Some of the most common home buying frustrations deal with assets and not being able to show enough money for closing. To prevent that from happening, it’s important to set the right expectation in knowing what expenses will arise throughout the process, and plan for them in advance. Failure to properly budget for these oft-hidden costs of buying a house could impede your plans.

Shop for Mortgage Lenders

 When you’re ready to apply for a loan, it’s smart to evaluate different mortgage lenders in your area. While finding a lender with the lowest rates and fees may be important, you should also consider working with a reputable local lender you make the strongest connection with.

A mortgage isn’t meant to just be a transaction–it’s a highly personal experience. Find someone who you have faith will do the best job and guide you smoothly through one of the most important financial decisions of your life.

If you’re looking to avoid the hassles of home buying, our team can help guide you through the process. To start your journey to homeownership, send us a message or give us a call at 800.521.5362.