This is the fun part. You get to look at all the possibilities and imagine yourself living in all kinds of interesting settings. And since you’ve been to your local loan officer for advice, you also have a good idea of what you can afford. You even have a pre-approval letter from the loan company. This letter is a basic conditional commitment from the bank which says that based on the information they know about you so far they will conditionally back your home purchase up to a specific dollar amount. It’s not a 100% guaranty that you will be able to get a loan but it’s a good start. And when you make an offer on a property it tells the seller you’ve done your homework and you know the house you’re making an offer on is within your budget. In Oklahoma, sellers don’t even have to look at your offer if you don’t have one of these included with the contract.
It will take you a few weeks to find the house you will want to own so in the meantime there are a few important things you need to remember about your home loan preapproval. It was made based on a quick snapshot of your financial condition at the time. That condition can change from the day you get pre-approved until the day you actually apply for the loan on your new house. Your goal is to not do anything that could negatively affect your credit. Bret Close with Elite Financial has these valuable tips on what not to do while you’re looking for your new home.
- Don’t change jobs, quit your job or become self-employed.
- Don’t buy or trade a vehicle.
- Don’t increase debt balances or let current accounts fall behind.
- Don’t spend money you have set aside for closing.
- Don’t omit debts or liabilities from your loan application.
- Don’t buy furniture or appliances or make a new credit application.
- Don’t originate credit inquiries (no new loans, credit cards, or lines of credit).
- Don’t make large deposits or transfer funds.
- Don’t charge bank accounts.
- Don’t co-sign any loan.
If any of these things become unavoidable, contact your loan officer immediately so he can help you determine the best course of action that will have the least negative impact on your home loan.
A house is the largest purchase you will make. When you’re dealing with a loan for such a large amount of money, you need to be sure not to do anything that will delay the final approval for your purchase.
In the meantime, you look at houses. You should sit down with your spouse and talk about what you want. Is a certain school district important? How many bedrooms do you need? How many garage stalls do you want? Is the size of the house or the size of the lot important? How old can the house be? Or do you prefer new construction? You should have a basic answer for all of these questions. You should also rank them in order of importance, because as you look you may find that your budget will affect what you can or can’t find available in all of these categories. Also, every house is different, if only because one may be in a separate area from another. You may like the drive to work from one or the drive to school from another. The first one may have a three car garage and the second one only two, but it includes a large back yard for your dog.
I always suggest to my clients that they plan to see a dozen houses in their price range before they decide on one. It still may be the first one you saw but at least you’ll be able to make good comparisons with the others that will confirm your final choice. This is not a hard and fast rule. One of my clients holds the record for looking at houses, which stands somewhere near 60 properties. And he bought the very last one he saw. Another couple looked at three and they were done. Sometimes when you walk inside, you just know.
But whatever the final number is, always use a Real Estate agent. As we discussed in lesson 1, it doesn’t cost you anything to do this. And what you will save in time and aggravation will be of great value to your sanity.
If you’re thinking about buying a home, I can help you. Call me today at 918-809-5199 and we’ll get started!
Next: What do I do now? part 4 – Making an Offer