Going it alone
Never try to purchase a home without involving experts. The two most valuable people who should be involved from the beginning are a loan officer and a real estate agent who understands the challenges buyers face. Both can be invaluable assets as you begin your journey to making the biggest financial decision of your life.
Forgetting about your budget
This is perhaps one of the most important parts of purchasing a home. New buyers often believe they are in the clear if they know they can afford their mortgage payment. Buyers also have to budget for property taxes, insurance and maintenance costs. Having an emergency fund can stop a leaky roof, or heating system malfunction, resulting in financial calamity. All expenses of home ownership and potential repairs should be included in your budget.
Shopping without a pre-approval
One of the most overlooked aspects of home ownership is buying power. If you go to a real estate agent with a mortgage pre-approval, you have more power as a buyer. Pre-approvals provide you with an exact loan amount, so you have far more leverage to bargain with. This tells the potential seller you have already had your loan approved and you won’t have to wait to find a lender who will approve your loan.
Using all savings prior to closing
Too often, we see first-time buyers wipe out their savings with down payments and closing costs. While it’s understandable that having a larger down payment may allow you to pay less monthly, not having an emergency fund in the event of a problem can cost you dearly. Most buyers should plan on having a minimum of three months’ mortgage payments in the bank at the time of closing.
Utilizing new credit prior to closing
Your loan is approved and now you decide it’s time to buy new furniture and other items for your new home. Hold on before you do this, as it could result in your loan not closing. Any change in the amount of credit you have outstanding could cause a lender to back out of a loan, even if you’re pre-approved. Most lenders will run a credit report days before closing and new credit could cause problems.
If you’re considering purchasing a new home, contact a Member Financial Representative at Oklahoma Central Credit Union for help. You can reach out to our mortgage division by calling 918-664-6000 and selecting option eight from the menu.