From scoping out the safest neighborhoods to finding your dream home, the home buying process can put a pep in anyone’s step as the excitement and joy of becoming the owner of your dream home becomes a living reality. Amid your home buying aspirations, it can be easy to go over the top with your finances. Financial hiccups near or before closing can cost you your new home. To help you avoid the chance of missing out on your dream home due to financial mistakes, let's cover a few things to keep in mind.
Not having your work life match your soon-to-be home life can be frustrating, especially in the beginning stages of achieving your new home, but do not let the frustration get to you. Changing jobs or quitting may hurt more than help as your budget changes, making it harder to get your loan approved or know exactly what you can afford to put towards your mortgage.
This may be a no-brainer to some, but, to others, this could easily be overlooked. Buying a home is one of life’s biggest expenses. Before closing, try not to spend an additional amount of money on unnecessary things or start to fall behind on your payments. Believe it or not, your loan considers all of your accounts before approval, so it would be best to keep up with your current bills and use your credit card as needed.
Switching banks only complicates things and delays the home buying process. Your Loan officer, Realtor®, bank, and lawyer are all familiar with your account and its history. Suddenly changing banks would restart the process and include extra unnecessary paperwork that could interfere with your closing date. If you feel the need to change banks, it would be a lot safer to do so once you have moved into your new home.
Buying a car is another large expense which may include taking out a loan to cover the payments. If you want to buy a car, before closing is definitely not the time to do it. Taking out a loan for your house and a loan for your car at the same time could put your mortgage approval at risk or drastically change your mortgage loan altogether.
You may be shocked, but buying furniture could cost you your mortgage loan. Among the excitement of decorating your new home, buying furniture can also be a costly expense that could result in taking out a loan to cover the payments. Adding additional monthly payments to your budget could harm your credit score, which will, in turn, affect your mortgage loan. It is recommended to stick with the furniture you currently have and shop for new furniture at a later time.
Home buying is exciting and can help homebuyers imagine a new life for themselves. While imagining your new life and buying your dream home, it is strongly advised to take things slow as you start to live out your American Dream. Our agents at The American Dream want nothing more than to help you achieve the home of your dreams. For more information about how we can help you find your dream home, contact your local agent.