3 Common Mistakes First-Time Silicon Beach Home Buyers Make
Look out for these pitfalls before you take the leap into purchasing a home in Silicon Beach.
Fannie Mae’s Economic and Strategic Research Group conducted a survey to gauge consumers’ understanding of mortgage qualification criteria. About 40 percent of consumers responded “don’t know” when asked about requirements for minimum down payments, and 54 percent and 59 percent, respectively, said they didn’t know required minimum credit scores and maximum back-end debt-to-income (DTI) ratios.
Here are three predicaments first-time buyers may encounter along the purchase journey:
1. Going it alone.
It’s great to do some online home shopping — and you might see homes in neighborhoods you’re considering and think a quick visit can’t hurt. Your first step should be talking with a housing counselor, lender, real estate agent, or other trusted adviser to help you understand if you’re ready to buy or if renting could be a better option.
According to the Zillow Group Consumer Housing Trends Report, only 46 percent of buyers did not get the first home on which they made an offer, demonstrating that in today’s fast-moving market, “disappointment and competition are now part of the process.” You need an ally who knows the system inside and out.
2. Looking at homes you can’t afford.
In order to compete in the Silicon Beach market, we highly recommend that home buyers get pre-approved before they begin to view homes. Pre-approval involves completing a loan application and submitting documentation like W-2s, tax returns, and pay stubs.
And remember, being approved for a certain amount doesn’t mean you have to spend that much. You should decide how much you’re comfortable paying for your mortgage each month, considering all of your expenses beyond the mortgage, and focus on homes within your budget.
3. Not comparing mortgage quotes.
Just because you have worked with one lender, or gotten pre-approved by them, doesn’t mean you have to stick with them. In fact, to get the best loan terms, you should shop around and compare quotes from different lenders. We can recommend several trusted lenders who offer competitive rates – and close on time! Contact us for details.