• Relying solely on online services
Mistake #1: Not Getting a Pre-Approved Home Loan
Not getting a pre-approved home loan is one of the most common mistakes made by buyers — particularly fir st-time home buyers. Why? Some people looking for the fir st time are so excited and anxious to get the process going that they want to dive in, head fir st, without doing the appropriate fin ancial research and preparation. Many aren’t sure they can even a ff ord it, but believe that once they’ve found the right home, they can simply “make it work.” Th is is a major mistake. If you’ve already started checking out homes in person, going to open houses, without fir st talking with your bank or other home loan lenders to obtain a pre-approved loan, and without a buyer’s agent to work alongside you, this is a major mistake that can really hurt you. It shouldn’t come as a surprise, but the truth is that many listing agents won’t want to work with you if you promise them a certain amount, and then end up not being able to fu lfi ll that promise because you don’t have the approved home loan to back it up. Your own assumption about what you can a ff ord — both the down payment and the monthly mortgage payments, among other costs — can contrast sign ifi cantly with what the bank is willing to lend you. Th is is especially true if you have poor credit or unstable income. Please refer to Chapter 1 on the steps you need to take before the home-search process to ensure you’re fin ancially prepared to make the jump into homeownership: • Improve your credit score. • Start saving up for a down payment and closing costs. • Build up your savings account. 62
Powered by FlippingBook