Buying a house is a whirlwind of emotions. It’s easy to get caught up in the excitement and overwhelmed with the scale of the purchase all at the same time. Stay focused to prevent making mistakes when buying a house in Atlanta Metro. It will save you a lot of emotional energy and ensure you don’t kill the deal to your dream home.
Don’t Make These 5 Common Mistakes When Buying a House in Atlanta Metro
1. Not Knowing Credit Issues
Embarking on the home-buying journey? Start by consulting with a lender and thoroughly examining your credit report. Remember, it’s not all about the FICO score; lenders scrutinize your debt history, credit card usage, and the status of your student and auto loans.
To position yourself favorably, aim to minimize revolving credit. Consider closing newer accounts to decrease your total available credit and strive to maintain credit card balances below 30 percent of your limits. Additionally, ensure that all student and vehicle loan payments are current.
2. Getting Pre-qualified Rather Than Pre-approved
It’s a common misconception among buyers that holding a prequalification letter is akin to having a golden ticket. However, a prequalification letter is not a guarantee of loan approval. It simply indicates that you’ve provided a lender with an overview of your financial situation.
On the other hand, pre-approval is a more rigorous process. It involves applying for a loan, undergoing credit checks, and submitting all necessary preliminary documents. This process allows lenders to assess your creditworthiness with greater confidence. A pre-approval letter not only specifies the amount you can borrow but also outlines the types of loan programs available to you.
Understanding the difference is crucial, especially when it comes to down payments. For instance, an FHA loan may require as little as 3.5 percent down, while a conventional loan could demand 20 percent or more. Knowing where you stand can make all the difference in your home-buying journey.
3. Not Spending Money on Inspections
Inspections are often seen as pesky out-of-pocket expenses that pile up quickly. Appraisals can set you back anywhere from $100 to $450, and a standard home inspection isn’t cheap either, running between $150 to $300. It’s tempting to think of all the other ways you could use that money, like splurging on a new sofa for your living space.
But here’s the deal: appraisals are non-negotiable when it comes to securing your loan. There’s just no sidestepping them. And while you might believe you’ve got all the info you need on your potential new home, a general home inspection can uncover what the sellers might not be telling you. That’s right, issues like a previously burst bathroom pipe leading to dry rot under the house? That’s something you’d want to know about.
And while you’re considering inspections, it might be wise to invest in a sewer video inspection. A few hundred dollars could save you from a disastrous backup during your inaugural Thanksgiving dinner in your new home. It’s all about protecting your investment and ensuring peace of mind.
4. Expecting Too Much for Budget
Embarking on the journey to purchase a home is an adventure filled with aspirations of the ideal dwelling. As you begin your search, armed with a preapproval letter, you’re aware of your financial boundaries. For first-time homebuyers, it’s important to recognize that some dream features may need to be compromised.
Letting go of certain luxuries, like a spa tub, might seem daunting. However, consider the long-term benefits: as your home’s value increases and you continue to pay off the principal, you build equity. This equity can eventually finance the addition of that luxurious bathroom or enable you to move to a home that ticks more boxes on your wish list.
Dreams often require patience to materialize. Instead of waiting on the sidelines for the perfect opportunity, take proactive steps towards your goal, understanding that perfection might evolve over time.
5. Buying Furniture Before the Closing
Furniture is a must-have, of course. But if you’ve heeded your realtor’s advice and opted for those inspections, you might find yourself lounging on a new leather sofa, gazing at the bill for your living and dining room set. Just as you’re about to relax, the salesperson comes over and asks, “Would you like to apply for our zero-interest financing?” It’s tempting, but beware of the alligator lying in wait.
It’s not uncommon for lenders to revoke loan approvals when borrowers start financing purchases during the closing period. The smart move? Wait until the deal is sealed and the keys are in your hand before ordering that furniture. And don’t worry, that alligator – the opportunity for a good deal – isn’t going anywhere.
Searching for an affordable home in Atlanta Metro? Chances are we have the perfect fit for your needs.