Many buyers begin their house hunt before qualifying for a loan. I can't fault a buyer for that. Before I was a real estate agent, I was riding my bike around Colonia Solana going to open houses. That's how I met the real estate agent who eventually helped me buy my house. I could afford a $60,000 house. I had been looking at $200,000 to $300,000 houses. I know from experience that once you've imagined yourself living in a house that costs four times your budget, it's hard to reel your expectations back in to realty.
Another mistake is to think this is a buyer's market. In the lower price ranges, low ball offers will not be taken seriously.
Remember to check the cost of utilities, and leave some room in your budget for unexpected repairs. If your rent is currently $800 including water, and you had trouble saving the money for your down payment, don't buy a house with a $1,200 mortgage payment.
When your loan officer says she needs your most recent paystubs and bank statements, that is not a suggestion, it's a requirement. You need to provide these documents promptly or close of escrow may be delayed. If the seller doesn't want to extend close of escrow because you held up loan processing, he doesn't have to.
Do not incur any new debt until after the deed records in your name! While waiting for close of escrow, some buyers decide their old furniture won't look good in their new house, so they go on a shopping spree and charge it to their credit card. Your loan officer should warn you not to change your credit situation and certainly don't quit your job, because your credit report will be refreshed and your employment will be verified just before close of escrow. Would-be buyers have disqualified themselves from getting a mortgage by changing their credit situation before close of escrow. Even moving money between accounts or depositing undocumented funds into your accounts can be a red flag. Don't change a thing.
If you are getting a gift from a relative for your down payment, your loan officer will need to know this and have the donor sign a gift letter. Check with your bank a few weeks before close of escrow to make sure the gift funds will be in the bank long enough for the bank to release the funds when you need them. Even though your gift check will clear in one day, your bank may have a policy of holding it for seven to 10 days so they can make some interest on it. If you are gong to wire the funds to the escrow company, find out how many days in advance you need to order the wire to get it to the escrow company when they need it.
Have the utilities put in your name effective on the close of escrow or earlier if the seller has them turned off before close of escrow. According to the Arizona Association of Realtors purchase contract, the seller is supposed to leave the utilities on through close of escrow, but some seller don't know this or don't care. If the gas gets shut off, SW Gas must come and inspect all the gas appliances and inspect the gas line for leaks. If any gas appliance is not up to code, the appliance must be repaired and all leaks must be fixed before the gas will be turned on. These repairs will be the buyer's responsibility, and may delay your move-in by a week or more. Getting electricity and water turned back on once they are off is not as difficult, but can still take several days.
Qualified loan officers, escrow officers and real estate agents have seen all these problems before and can help you navigate the home purchase mine field.
Tierra Antigua Realty