Maybe you sold your house so fast you were forced to move in with your in-laws because you didn’t have enough time to find a new one. Or maybe all the houses you like go under contract in six hours and you keep getting outbid.
Wherever you’re coming from, the last thing you need during your home purchase is more stress.
Here are some tips I share with my clients to make sure they get through this process with their sanity, and their closing, intact.
1. Your Credit Can Be Your Best Friend…Or Your Worst Enemy
There’s nothing like falling in love with a house and then being turned down for a mortgage because you didn’t know about an error on your credit report.
Before you call any bank, or go looking at any houses, your first step should be to pull your credit report.
You’ll find a dozen online services that’ll provide your reports for a low, low price, but you can skip right over them because, lucky you, you’re entitled to a FREE annual credit report through The Fair Credit Reporting Act (FCRA).
You’ll need to answer a series of questions to confirm your identity, but the time you spend on that is worth it. When you’re done, you’ll have a credit report from all three reporting agencies and you’ll know exactly where you’ll stand with any lender before you call them.
Another good site to try is Credit Karma.
They’ll give you your credit scores from TransUnion and Equifax for FREE and provide a lot of helpful calculators for different types of loans.
And if you need a loan (not for a home, though) they’ll show the products they believe fit your credit profile.
2. Your Cousin’s Best Friend’s Hairdresser’s Husband May NOT Be the Best Real Estate Agent for You
If you think you’re stressed now, just imagine how you’d feel if your real estate agent went on vacation the weekend your house went on the market, or if you had one that kept ‘forgetting’ to return phone calls.
Your home buying success has everything to do with choosing the right agent.
You may want to work with a Realtor you know because it’s easier than having to search for one, but don’t assume good work ethic or skill is guaranteed because you know them.
Make sure you vet ALL your agent prospects just like you would anyone else who holds your happiness in their hands. Get references from at least two of their recent clients and look at how quickly, and at what price, their deals closed.
You can also ask your mortgage lender for referrals. They know firsthand what agents work the hardest to get their clients’ deals done, because they’re at the closing table, too.
Or, if you prefer to do your agent search online, try a site like Zillow or Redfin for agent reviews.
Whatever you do, just don’t phone it in when it comes to hiring your agent. If you do, you’re likely to find an agent that’ll do the same.
3. Beggars Can’t Be Choosers…Except When House Hunting
I know, I know, this is easy for me to say. I’m not the one looking for a house in a market where listings go under contract in just a few hours.
But the thing is, you’re going to live in this place a really long time (maybe forever). Don’t you want the house you buy to be THE ONE and not just A ONE?
If you settle for whatever you can find, you’re likely to overlook your list of must-haves, and end up even more stressed than when you were living with your in-laws.
And if that doesn’t inspire you, just picture the amount of money you’re going to spend like it’s piled up on your kitchen floor.
You’re going to pay that for the place where your family will grow, so make sure you love every square inch of it before you buy.
If you don’t, keep looking.
4. Be Prepared To Provide Documentation, and Then Some More Documentation
You’re about to become really good friends with the people at your local Fed Ex Kinkos.
You’re going to have to fax, email, and copy so many things you’re going to have to replant a forest of trees to make up for the paper you’re going to use.
And your records? I hope they’re organized. Looking through random shoe boxes for proof that you made that final car payment doesn’t make for stress-free home buying, let me tell you.
You want your financial documents to be in order before you meet with any lenders or apply for any loans. This makes the whole process easier on you AND your bank.
Contact us today to find out what items you will need in preparation for your loan.
5. Your Scenario May Not Be As Bad As You Think
Sure, not paying your credit card bills in college because you ‘didn’t feel like it’ won’t put you in the best light when you’re ready to buy a house, but your situation may not be as bad as you think.
A potential lender should offer an honest opinion of your financials and tell you right away if they can offer you a loan program or not.
And sometimes, working with a mortgage broker will work out better for you if you have less-than-perfect credit. We work with a lot of different lenders who all have their own requirements, so if one lender says no, we have a list of others that might say yes.
Bottom line: Make sure you talk to a qualified, honest lender before you assume you won’t qualify for a loan, because their answer may surprise you.
6. Say Adios to That Vacation on MasterCard’s Dime
If you’re lucky enough to get to the point where you find a good Realtor and a house you love, AND you get pre-approved for a mortgage, the last thing you want is the deal to fall through because you decided to make a large purchase on credit.
You’re pre-approved based on your financial picture at the time of your application.
In order for your bank to feel happy about lending to you, your credit has to stay exactly the same until at least 10 days AFTER YOU CLOSE. (Yes, you read that right.)
There aren’t two ways around this, and it’s not an It-Won’t-Happen-to-Me scenario.
If you make any large purchases on credit or open a new credit line before your bank wants you to, your closing will be in trouble, I guarantee it.
So that’s it. Six really easy things you can do to make your home purchase as simple and stress-free as possible. If you follow these guidelines, you’re sure to have an easier time with the whole process.
Contact one of our experts today to learn more!