4. Taking Your Credit For Granted
Unfortunately you may be reading this report too late to have kept from making this mistake but it is never too late to start improving your credit rating. In the last few years the way lending decisions are made has become much more automated. And the way the decisions are made has changed dramatically. For the most part decisions are made based on certain guidelines and not left up to subjective humans.
This places more and more importance on your credit rating when applying for a loan. How good your credit rating or “scores” are depends on several factors such as: Current credit balances, Amount of current available credit, Late payments (How many, How late, How recent, Type of Account) and recent inquiries about your credit.If you are planning on getting a mortgage loan make sure you are making all of your current payments on time and avoid any unnecessary inquiries into your credit. In other words, don’t go out shopping for a car or new furniture and have sales people all over town running credit checks on you. If you want to have the highest scores possible and therefore qualify for the best rates available it is best to be patient and wait until your loan is done before you go do things that will affect your scores.
5. Not Having a Prioritized List of What Is Important
Many new home buyers will often get swept up in the excitement of becoming homeowners then after it’s too late they find out that the home they just purchased does not suit their needs. Before even beginning the process clearly define your wants and needs. Put the list in writing and prioritize it in order of importance. Measure each property you look at to determine how well it matches your list.
Here is a list of some items to take into consideration:
Size of home: Number of Bedrooms, Baths, Etc.
Style: Are stairs or a basement ok? Etc.
Type: Single Family, Duplex
Condition: Does is have to be near perfect or are you willing to do some repairs in order to get a better price?
Location: Type of neighborhood, Proximity to work, schools, etc.
Special Features: Garage, Wheelchair access, Air Conditioning, Etc.
6. Not Checking on Title and Boundary Issues
It’s no fun to get to closing and find out that there is a problem with the Title to the property. These problems could appear in the form of undisclosed owners, tax liens, mechanics liens, easements, leases or other encumbrances. One of the first things that should be done as soon as you come to an agreement on the purchase of a property is to order a preliminary title report from a title company. Your real estate will normally handle this. Make sure you receive a copy and review it.
If there are any parts of the report that you don’t understand, ask your agent or an employee of the title company to explain. If there are issues that need to be taken care of make sure that they are completed before closing and that the Title Company is issuing you a clean policy of Title Insurance. This Title Insurance Policy will help protect you from claims that may come along after the fact.It’s even worse when you find out about a problem after closing such as a problem with your property boundaries. For instance, if your neighbor discovers that the shed at the back of your property is sitting partially on their property it’s your problem regardless of whether the shed was built there by you or a previous owner. Survey’s help you avoid these types of problems.
The dependence on survey’s varies from area to area depending on how established the neighborhoods and boundary lines are and the type of legal descriptions that are used. Your agent can give you a good idea of the necessity of a survey or an update of a previous survey. However, if there is any question as to the boundary lines of a property your offer should be made subject to your approval of a survey by a licensed company.
7. Not Getting a Thorough Inspection
Another valuable tool for avoiding unexpected problems is a professional inspection done by a licensed home inspection company.
Your offer should also be subject to your approval of just such an inspection. A professional inspector will objectively inspect the home inside and out and should be able to give you a report of any item that needs to be fixed with associated, approximate cost.
No home (even a fairly new home) is perfect. You should not be alarmed when the inspector suggests minor repairs or maintenance issues. This is quite normal. Avoiding the large repairs or expenses (such as termites, radon, mold, lead paint or asbestos) is when the inspection will more than pay for itself.
The final installment will reveal the last of the common mistakes.