Now that market conditions in Durham region are a little more favorable for home buyers, more first-time buyers are looking seriously at purchasing their first home. There are a few key things to keep in mind that more seasoned home buyers may already know. Some of these things could actually put your home purchase in jeopardy so it’s crucial that you be aware.
1. Not being pre-approved. Your first step when you’re thinking seriously of purchasing a home needs to be getting pre-approved for financing. This serves two very important purposes - a) you’ll know exactly what you can afford before you start looking, and, b) you’ll be in a much stronger position in the case of a multiple offer situation than someone who isn’t pre-qualified.
2. Not using a reputable mortgage broker. Ask for referrals from family, friends and colleagues who have purchased homes recently in your area. Ask your Realtor® who they recommend. Educate yourself on the basics of mortgage lending.
3. Pre-qualification and pre-approval aren't the same thing. A pre-approval requires you to provide proof of your Financial Health, where pre-qualification is based on a conversation and estimates of figures. in a pre-approval, your tax returns, bank statements, pay stubs and more are packaged and submitted to A lender who will review and approve you and issue a written commitment for financing up to a certain amount that's good for a limited time frame - usually 90 to 120 days. in a hot real estate market like Durham region earlier this year, a pre-approval letter can make the difference between whether you come out on top or not in a multiple-offer situation.
4. Looking at home you can't afford. Especially online. Resist the temptation to browse outside of your budget. You'll only set yourself up for heartache.
5. Writing a poor personal letter - or none at all - when you submit your offer. When you're competing with other buyers, a personal letter to the seller can tip the scales in your favor. Home selling is a very personal and emotional process for many people and knowing you intend to take care of their home or perhaps raise your family there can give a seller some comfort or “the warm and fuzzies” about you. Just don't get overly personal though and definitely don't share any renovation or remodel plans that you might have in mind. Sellers can quickly take offense to you if they think you don't like their taste in decor!
6. Making a big purchase before closing or opening a new credit account, especially after you've bought but before closing. Your approval was based on specific financial information. Any change to that information can jeopardize your overall Financial Health and cause a lender to retract their financing before closing. Even buying an appliance can throw your debt to income ratio off enough to raise a red flag. Don't buy anything until after closing.
7. Failing to budget for closing costs. Lawyer fees, title insurance, movers and more can quickly add up. Make sure you obtain quotes ahead of time and have fun saved for these expenses. These are cost that will need to be paid on closing date or very close to it.
Working with a professional Realtor, like Rebecca McGarvey and her team of professional Realtors®, will help you avoid these potentially costly mistakes as they guide you through the home buying process. Contact Rebecca today for more information about available homes for sale in Durham Region and surrounding areas at 905-260-4305 or firstname.lastname@example.org.