in this video we're gonna cover what not to do when buying home buying a home is
stressful enough even if everything goes smoothly
okay so I want to show you eight things to avoid to make sure that you don't run
into big problems when you're purchasing a home these are things that a lot of
people do that they that they keep doing and it causes more problems and more
stress in the future because real estate is stressful enough to begin with let's
make sure that we do everything we can to make it an enjoyable process and a
process that's fun to go through every few years because you'll probably be a
little bit tired of it after the first time you go through ok so my name is
Kyle I'm a loan advisor with winthehouseyoulove.com let's go ahead
and dive into this okay number one is going and spending above your budget all
right so um I've seen this in some comments and all over the Internet where
people kind of get upset because mortgage lenders will allow people to
borrow more than they're comfortable with and what's crazy is they take the
loan and they say that's fine by me okay here's the deal if somebody says you can
qualify up to a payment of $2000 a month but you know for certain that you can
only pay $1,000 a month don't agree to $2,000 per month that's crazy that's not
the lenders fault that's your fault for taking that money okay
lenders have risk profiles that they allow according to the federal
government and gia sees a bunch of fate federal regulations just because you're
approved for that amount does not mean you have to pay that amount it doesn't
mean you have to buy a home that costs that much money
all right so a big issue is people will get approved for a certain amount and
then they just go and say great I'll go purchase a home have this super high
mortgage payment and then they become what's called house poor all right house
poor means that you might have a great income but most of the income is going
straight to your housing alright don't spend above your budget you have to know
what your budget is you're the one responsible for your finances and what
your budget looks like make sure that you stay within that get quotes from
your mortgage lender properties to see what that monthly
payment is gonna look like so if it's in your budget also a big mistake is not
making an absolute needs list keep in mind that i put in the word here
absolute not just needs lists absolute needs list okay because people say
making these lists a lot and it's easy to hear needs list and it goes straight
out the ear straight in one ear out the other
all right it goes straight through us and they think yeah needs list i know
what my needs list is but what i'm talking about is an absolute needs list
okay a needs list it's easy to put on you know things that you know you need
but also things that you want an absolute needs list is your
non-negotiable things that you need for instance how many bedrooms do you need
how many bathrooms do you need logistically for you and your family are
there other things that you absolutely need in at home this is gonna make your
home shopping a lot easier if you don't do this you're gonna be one of those
people who goes out and sees 2030 homes and still ends up finding nothing and
saying the real estate market is all messed up you need to have an absolute
means list and that needs list needs to say you know it's gonna have to say
absolutely needs list and then you're gonna put down your list of items that
you say these are the things that we absolutely need then you can narrow them
down with your realtor before you go and look for a property that's gonna save
you so much time so much stress it's gonna give you off off the emotional
rollercoaster of you know getting excited to go see your property you see
a property you're up here and now you're down here and then you get back up here
and it's it's a nightmare and don't go through that emotional struggle also
don't submit wildly lowball offers all right this just offends the seller and
it's probably gonna make it difficult to find a good realtor to work with all
right now I get it you want to purchase a home for a great cost
I completely understand but the problem is sometimes people will see a $200,000
house and they think let's put an offer 480 let's see how it goes no no good
realtor is going to work with you long-term if you're going to waste their
time in your time and the sellers time and the sellers realtor time by
submitting those offers okay you have to understand the real estate is a market
all right so obviously the room for negotiation but a seller is
putting a house out there they're saying this is what we're asking for we're
asking for let's say $200,000 all right that is not they didn't just make up
that number they're saying we really need $200,000 and the main reason why
they request a specific amount is because you have to keep in mind that
they also have things that they have to pay off they have expenses they have a
mortgage they need to pay off they have a realtor expenses they have any closing
expenses and so there is a specific number that they have to hit to make
sure that they're either going to prop it or break even on the sale of the
property so super wild lowball offers usually don't work now if you are
looking to find a home for a great price I would suggest talking with your
Realtor and they're gonna have great options for you to see properties that
might need a little care and attention that you can buy at a great discount and
also ask their suggestion on if you do want to submit a lower offer what are
ways that you can do that because if you do submit a lower offer then the rest of
your contract needs to support it right if your contract is a weekend price it
needs to be strong in other areas for instance you need to close faster you
need to ask for less contingency periods if you have a low price so talk with
their realtor about that don't just submit super low offers I talk with
Realtors all the time who will fire clients because they cannot keep
spending their time submitting offers that are half the value of the asking
price okay also this is a big one big debt
purchases when you're going through the mortgage process once you get
pre-approved everything in your finances should be pretty locked down obviously
you can still use credit cards a little bit you can still you know you're still
paying down debt but if you go out and take new debt that is going to mess up
your application and if you're already under contract then the underwriter has
to read underwrite your loan if you have big debt purchases like a new car or you
go and put a thousands of dollars on your credit cards or you purchase
furniture for the new house if you do these things it's going to slow down the
mortgage process and make things very frustrating and complex and I have seen
people who we'll go and take out new loans or their
purchase something new and then their loan gets denied because now they can't
qualify with the new housing payment because they had more debt put in there
alright also changing jobs this is a big thing please don't do this I did have a
guy a couple months ago we were five days from closing and then he said guess
what I just changed jobs but I got a raise everything will be fine and I said
no we now need you at that job for an additional 30 days because we need to
pay stubs to make sure that that income is solid before we can close so we work
five days from closing and now we have to wait another 30 days to get to pay
stubs so that we could close on that home alright and he's lucky the seller
let him extend the contract because if you go past your contract date the
seller can walk away they don't have to give you an extension so don't change
jobs don't make any big changes all right to your debt or your income or
anything like that because your loan is underwritten based on the consistency of
your income that's one of the most important things to your loan
application is how consistent your income is so if you change jobs
alright you change your employment that effectively changes your income even if
it's exact same the underwriter has to guarantee consistency so if you change
jobs anywhere in that process you're going to run into problems so I would
highly recommend it if you're under contract don't change jobs after you get
pre-approved don't change jobs you're gonna have to talk with your mortgage
lender about the impacts of what job changes will look like if you've had a
job change within the past six months make sure your lender knows about that
or if you're planning on a job change in future six months tell your lender about
that and make sure that they know so they can help you coordinate and find a
schedule that's going to work okay another thing is having unrealistic run
unrealistic expectations in all areas the biggest unrealistic expectation I
see is in the timeline all right I get it you want to close on a home but it's
always frustrating for everybody else in the process when people don't have a
realistic idea of how state works especially regarding the
timeline for instance when you get under contract it's probably gonna take 30
days to close I can't tell you the amount of people that I tell them hey
this is gonna take about 30 days and then they call me the next day and say
like what can we close in like next week no it just doesn't work like that
there's a lot of moving pieces and so you need to slow down and understand the
steps that way you can have an enjoyable process all right real estate does not
move when we want it to move because there's so many people involved there's
so many systems and so much guidelines that we have to navigate all right and
so it doesn't move as quickly as we want to and we just have to live with that so
we have to have realistic expectations about our timeline we need to have
realistic expectations about our money as well okay it's always a little
interesting to hear people's the differences between the purchase price
they want and how much they want their monthly payment to be right for instance
if you're buying a $400,000 house I'm sorry but your payment is not going to
be $1,000 per month all right you need to have realistic expectations
of what your payment looks like versus your purchase price along with what your
down payment looks like right a lot of people still think there are tons of
first-time homebuyer programs there are a few but most of them are really costly
they don't exist like they used to before the housing crash right that's
why a lot of those programs don't exist anymore is because they caused a housing
market crash it caused an economic small economic collapse right some of these
programs did so have realistic expectations and one of the best ways to
do that is what you're doing right now you're watching a video getting educated
on what the process looks like so one of the best ways to avoid unrealistic
expectations is to ask questions if you don't know something ask questions ask
people to explain things ask to understand about the process this is
going to help you so much in the future to manage those expectations okay large
deposits if you have any cash on hand or anything that gets deposited into your
bank that is more than what you regularly deposit in your bank this is
called a large deposit mortgage lenders will want to know where that money
came from and the reason why it's super annoying but ever since the Patriot Act
came into play mortgage lenders now have to look at bank statements to see any
large deposits so that they can spot money laundering and terrorism all right
it's very frustrating because most the time people put money in their bank
account because they got cash or they got a gift or something happened maybe
they sold a car and now that deposit has to be tracked and documented and if it
can't be documented then that money cannot be used okay so if you have a
large amount of money that you're going to deposit into your bank account within
the past two months let your lender know about that because
that's gonna have to be documented or you're gonna have to find another way to
come up with those funds because you cannot use undocumented money right so
you can't use cash and most cash can't be tracked so it's very difficult to use
that at a mortgage transaction one of the best ways to determine large
deposits is if it's 50 percent or more of your monthly income okay some lenders
will even drop that down to 25 percent or more it just depends on the lender
but avoid large deposits and finally I've always distressing too much right
one of the best ways that you're gonna avoid that stress is by what you're
doing right now again understanding all the steps in the process and getting
educated having a solid game plan moving forward but things in life happen right
as much as we want to control them as much as we want to have a tight grip on
things things happen there's so many moving pieces in real estate and
sometimes we have to say it is what it is what do we do next right it's easy to
get frustrated it's easy to get overwhelmed but it seems like whenever
we grab on something the tighter we hold the more it breaks the thing under our
grasp okay so take a deep breath it's gonna be okay get a plan learn ask
questions get people around you have a team then start to move forward relax
and try to move at a consistent pace alright allow other people to help you
the more that you get sucked into this isolated
world of holding tight and feeling like you have to be in control things this
more stressful it's going to be the less fun it's gonna be and the more difficult
it is to win the house that you love okay so hope this gives you a good idea
of what not to do when buying a home sometimes it can feel like you're
navigating a lot when purchasing even when things go right because so much
change is happening but do what you're doing keep learning get people on your
team ask questions make a plan and you'll be on the right path to win the
house you love