WHAT SHOULD YOU NOT DO BEFORE BUYING A HOME IN PORTLAND

Just because your home buying transaction is already underway doesn’t mean getting the Portland home of your dreams is already a sure ball. In fact, you might be surprised to discover just how many ways homebuyers like you can actually mess up a home purchase.

In this article, you will discover the things you shouldn’t do before buying a house.

Among the things you need to avoid before a home purchase are the following:

1.       Missing loan payments

2. Consolidating debt

3.       Changing jobs

4.       Shifting your finances around

5.       Changing banks

6.       Buying a car

7.       Buying furniture on credit

8.       Making huge deposits into your bank account

9.       Lying on your loan inquiry    

10.   Using your savings to cover closing costs

11.   Overextending yourself

12.   Co-signing a loan

13.   Spending more than the value of your home

Keep reading to learn more about the many ways you can mess up your home purchase.

What are the things to avoid before a home purchase?

Imagine that the seller of your dream home has already accepted your offer to purchase. The home in Portland is already under contract and you’re already counting down the days to closing.

By the time the lender has pre-approved you, you might think that your home purchase is already a sure thing. Unfortunately, nothing is certain until the keys are already in your hand. 

There are always hurdles to get past before your dream home becomes yours, and your decisions between now and closing will greatly determine the success of your transaction.

To prevent future headaches and slowdowns, here are some of the things you need to avoid before buying a house in Portland, Oregon:

·         Missing loan payments

Before finalizing your mortgage, your lender will look at your credit again to see if you are able to keep your payments current on all your loan accounts, including your car loans and credit cards. If you have missed any payment before buying a house, it may lead to you losing the loan. Remember that lenders have all the power to revoke a mortgage commitment.

·         Consolidating debt

Do not be tempted to consolidate debt before you buy a home. Although it sometimes makes sense to bring all your debts under one umbrella payment, debt consolidation involves hidden fees and interest rates that may surprise you in the future. If you don’t want a bad credit score, don’t be tempted to go this route.

·         Changing jobs

When you buy a house, one of the things that lenders look into is your employment history. If you don’t want to mess up your transaction, do not change jobs before you purchase a Portland home.

For lenders, financial stability is everything. If you change jobs before your home purchase, lenders will think that you are not financially stable enough to make your loan payments. If you don’t want lenders to think that you don’t have a steady income to keep up with your mortgage, you may keep your career shift under wraps until after the closing.

·         Shifting your finances around

Lenders pre-approve home buyers based on the current state of their finances. If you want to get pre-approved, don’t make the mistake of shifting your money around just to better position yourself. If you are planning to make any financial changes, don’t do it until after you have finally gotten your mortgage.

Keep your finances in one place before closing and don’t take the risk of moving your money around different accounts before you get a loan so your lender won’t need to ask you to explain yourself. This is because once they ask for an explanation, you will be forced to give them a detailed account of why you had to shift your finances around.

·         Changing banks

While it is normal to see a great offer from a competing bank while trying to get a loan, changing banks before you get your loan may lead to not getting pre-approved. Take care of your banking history by not being tempted to start banking at a new institution just before getting a loan.

·         Buying a car

One of the biggest mistakes homebuyers make is buying a car before purchasing a home. Since that may negatively affect the state of your credit, doing so is like throwing a wrench into your home-buying plans. When you add to your debt load the debt that your car purchase brings, you may be unable to get the loan you need to purchase your dream home.

·         Buying furniture on credit

Using credit to prepare for your new living arrangement is another huge mistake that you may commit before buying a house. While it is exciting to start buying furniture for your new home, remember that doing so means taking on new debt that may affect your credit. This may result in you not getting approved to get a loan for your home. A better idea would be to wait until your loan is approved before shopping for furniture.

·         Making huge cash deposits

If you don’t want to make your lender uneasy, don’t make large deposits into your bank before your home purchase. 

Most lenders prefer that you have the money going to your down payment in the same account for at least two months before you buy a home. They call it “seasoning” and consider this two-month period as a demonstration of your stability and ability to make loan payments. 

If the lender notices huge deposits moving in and out of your account, it may prompt them to scrutinize your finances or worse, back out.

·         Lying on your loan inquiry

When you stretch the truth about your loan inquiry, you give your lender a reason to not approve your loan. When you fill out your loan application, make sure that you don’t mislead your lender in any way because that will only cause you problems in the future. Remember, fraud is a big no-no when applying for a mortgage.

·         Spending your money to cover closing costs

When you buy a home, it is normal to feel a sense of financial scarcity. Since money is tight around the time of your home purchase, you may be tempted to use the money you have saved up to cover your closing costs. Don’t do this. 

·         Overextending yourself

Just because you see that you can afford a home on paper doesn’t mean that you can actually afford it in real life. During your home search, you will find lots of lenders offering you homes which they think you can afford. However, what you qualify on paper doesn’t mean you’ll be comfortable living on day-to-day. Don’t make the mistake of overextending yourself when buying a home if you don’t want to end up becoming a slave to the property.

·         Co-signing a loan

Being a co-signer for someone else’s loan is like financially obligating yourself. Don’t forget that when you co-sign a loan, you allow a lender to come looking for you to pay in case the primary person on the loan is unable to pay. 

Since home lenders are aware of this, they usually disapprove applicants who have previously cosigned a loan. If you want to increase your chances of getting pre-approved, focus on keeping your credit stable and postpone co-signing until you have already secured the money for your home purchase.

·         Spending more than the value of your home

When involved with multiple offers, it becomes common for the sale price to be pushed above the asking price. Although you may be willing to bite this as a homebuyer, a lender may not. As a result, you may be stuck either putting up more money or losing your desired home in Portland. 

Remember that when buying a house, you cannot always assume that the seller will be cooperative and drop their price for you. If you can’t make up the difference, you may end up being rejected for the loan.

Working with an experienced real estate agent can help you make the best decisions and avoid mistakes in home-buying. If you are buying a Portland home and are looking for a real estate agent in Portland Oregon that you can trust, call me, Anne Stewart, at 503-804-1466 today.