Buying your first home is an exciting time in your life. With careful planning the transition from renter to home owner can be very smooth and easy. There are three important things that every first time buyer should remember as they look for their dream home.
Hold off on big purchases.
You have your credit report in front of you and you are excited to learn that your credit score is higher than you thought. Just because you have the credit, does not mean you should use it. Sure a new minivan would look great on the driveway of your new house, but buying it now, before you finalize your new home loan, could jeopardize things. The bank is going to look at the debts you have when deciding just what kind of a loan you can be expected to repay. If your credit report suddenly shows up with a lot of high balances, the lender may think twice about giving you the loan or may decide since you are somewhat of a risk you need to have a higher rate of interest.
Get a home inspection.
Hiring someone to come in and inspect the home from top to bottom is a very smart move on a buyer’s part. The professional has no emotions attached to the home and can give you an honest assessment of its problems. He is also trained to find things that you might not see or the seller might not know about such as termites, mold, wiring problems, and foundation issues. You will have to pay for the inspection but the typical fee of $100-$400 could save you thousands of dollars in the long run. In the short term, it could even save you money if a problem found by the inspector justifies offering the seller a lower price for the house.
Don’t give good faith money directly to the seller.
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If you are asked to give earnest money it needs to go into a trust account and not directly to the seller. The seller isn’t allowed to touch the money until everything closes, but if you give the money directly to the seller and the deal falls through, you will have a hard time getting that money back if the seller has already spent it.
View our recommended lenders for Mortgages For People With Bad Credit. Also, view our recommended sources to Check Your Credit For Free.
