Texas Mortgage Refinance

Are you in the market for a new home?  If so, you will find this is the ideal time to buy.  Today, it is a buyer’s market, which means there are more homes for sale then there are buyers.  The result is more homes from which to choose, but also being in a great position for negotiations.  Too often, people will make common buying mistakes that turn out to be costly.  In fact, some mistakes are so big that the consequences are serious.

As with Texas mortgage finance or financing a home in any state, knowing what to look for will definitely save you from making buying mistakes.  The following are some of the more common mistake seen, which you would need to avoid.

Major Purchases

One of the most common buying mistakes seen is that within six months to buying a home, people will go out and purchase a new car, a boat, motorcycle, or they will spend a significant amount of money on credit cards.  Unfortunately, what happens is that when the lender pulls the credit report, they immediately see the big purchase, making them very nervous that the buyer may be financially in over his or her head.

Lenders want to feel confident that the person buying will not default on the loan.  Even if you have adequate income, on paper, a major purchase can look bad.  Remember, lenders use a debt-to-income ratio, which determines the ability to make enough money to make a mortgage payment compared with bills.  Typically, lenders want to make sure the mortgage payment would not account for more than 28% to 30% of the buyer’s gross income.  If you are interested in a new car, wait until after the home has been purchased.

Employment

Another buying mistake seen is people switching jobs close to the same time as putting an offer down on a house.  Again, lenders want to feel their investment is protected.  Therefore, they generally want to see between three and five years of continuous employment with the same company.  Sometimes, they will look at the industry opposed to the company.  In this case, if the buyer were a banker and left one bank for another shortly before buying the home, the lender would see this as being a non-threat.

FSBO

In the situation of purchasing a home “for sale by owner”, another common buying mistake is that the down payment on the house is handed over to the seller prior to the entire transaction being done.  What can happen in a situation such as this is that the down payment is spent by the seller and then if the sale falls through, the buyer is out the money.  This means taking the seller to court, which takes even more money and precious time.

Real Estate Agent

Although buying a home can be successful without the assistance of a real estate agent, we strong recommend you use a realtor.  A buying mistake is not having the expertise needed to buy a home and not using the professional services of a realtor.  Remember, a reputable and qualified real estate agent not only helps in finding the perfect home but can also help with financing, negotiations, closing, and much more.

Closing

You also want to avoid making a buying mistake of not being involved enough.  Yes, a qualified real estate agent will handle a lot of the transaction and process of buying a home but as the buyer, you also need to be involved or at least kept abreast of what is happening.  Too often, buyers leave everything up to the realtor and soon, they are lost in the transaction.  Being educated and knowledgeable about the goings on with your purchase is very important.

Inspection

Although an inspection is a huge part of buying a home, do not skimp on the cost of getting the best inspector possible.  This person will go through the house in great detail, looking for any damage or potential problems that could end up costing you serious money if not fixed prior to the close of the house.  This might include a broken beam in the attic, leaking basement, bad wiring, termites, and other serious problems.  Therefore, while the cost of a reputable inspector may be more than you had hoped to pay, in the end, it is a huge investment you want to make.

As with any buyer, you want the purchase of your new home to be flawless.  After all, the easier things go the quicker you will be able to settle into your home.  Buying a home is an exciting venture, one that comes with many benefits.  Using the information provided in this article about common buying mistakes will help you become a very happy homeowner.