Just as there are certain steps that you must take when buying a house—such as ensuring a good credit score and having enough for a 20 percent down payment—there are also actions that you shouldn’t take. To give yourself the best chance of landing your dream home, and keeping it, here’s what NOT to do:
Don’t quit your job
Aside from your credit score, lenders will also be looking at your ability to make payments, which means they are going to check if you have a steady source of income. A common baseline for income history is six months of consecutive employment and earnings, but some lenders will check as far back as two years. Quitting your job during the loan process will be alarming to lenders, and could end up derailing your home purchasing plans.
Don’t take on extra debt
Your mortgage is going to take a huge chunk of your monthly payments, so do your best to keep any debt minimal. A good rule of thumb is to keep your monthly bills—including your mortgage, utilities, and credit cards—to just one-third of your regular income so you’ll have enough remaining income to live comfortably AND still set aside some cash for rainy days.
Don’t miss bill payments
Paying your bills promptly shows lenders that you can responsibly manage loan payments, which is a major consideration in getting approved for a mortgage.
One single late monthly bill payment can have a negative impact on your credit score that can take years to repair. Although a low credit score won’t necessarily prevent you from securing a mortgage, it can put you out of reach of favorable interest rates.
Don’t take on the home buying process on your own
You may think that you are saving a lot of money by not working with a real estate agent, but unless you are a well-experienced homebuyer yourself, you may end up spending more by taking on the entire process on your own. Always with your best interest in mind, a good real estate agent leaves no stone unturned to ensure you get your money’s worth—even negotiate the price for you at an amount lower than you might expect.
Furthermore, a good real estate agent will guide you to what price range you should be looking into. You may want that 5 bedroom home with luxury fittings, but if it’s really too much of a stretch on your finances, that dream could turn into a nightmare. The experience of a real estate agent will give you expert advice on how to manage payments as well as how to land the right home for you.
Ready to look at homes for sale in La Cañada?
I can do more than just help you complete the home purchase process. I can be your guide throughout the whole buying journey. Let me show you the best homes for sale in La Cañada and its nearby communities. You can reach me through 818.378.7928 or leave me an email at kathy(at)imuragent(dotted)com.