QUIT DOING THIS! | Home Buying in 2022

Home buying is fun but there are big mistakes most people make that can make the process so much harder and even keep them from being able to buy altogether.
Do you know what the mistakes are? You might be making the first mistake right now. So you’re excited to start the home process so you get online and you start looking at homes or maybe some YouTube videos about home buying. Then you realize hey, I should probably figure out what I can afford. So maybe you hit up an online mortgage calculator which usually are somehow but not really that great and then you look for a lender who can tell you what you can afford.
They do a pre-approval for you and say you should be able to afford x go look for homes and this is your first mistake and you didn’t even know you did it.
Here’s what happens next, your real estate agent starts sending you homes you might like and you’re loving this and getting excited about what things you want in a house and the areas you want to be and then the perfect house comes along you try not to fall in love but it’s too perfect you put in an offer and then three days later you find out 30 other people also did and your offer sat at the bottom of the stack and wasn’t even considered but why? Well because it was a super weak offer.
Twenty years ago houses used to sit on the market for months before they got a single offer. Today is different. We have very few homes for sale and a ton of people who want to buy. The old pre-approval just won’t work anymore in today’s market.
You’re competing against cash buyers which can be as many as one in four people offering on a home and if they’re not cash the other buyers might be putting down way more money than you, which is attractive to a seller because they understand a higher down payment will typically have a lot less issues qualifying for a loan.
You need the strongest offer you can muster. A pre-qualification or pre-approval just won’t be enough in most markets and you might find yourself frustratingly losing house after house over and over. This should be a fun process not a frustrating one.

What Makes a Stronger Offer?

I’ve made a whole video on this which is linked in the corner and in the description. The basics are you’re going to need a full loan underwrite before you put in offers. It doesn’t take long and you’re gonna need to do it eventually. Anyway you can also apply for a cash buyer program. These are new. The lender buys a home you want with their cash then they sell it to you right after you get the house. They get the loan, everybody’s happy. Spire Financial has a cash buyer program. The link is here and in the description as well. Take a look to get the details and see how you can qualify now that you have a strong offer.

What are Some of the Other Big Mistakes?

The next big mistake has to do with your credit. Oh Nick, I know this one. Don’t pull your credit. It’s going to drop your score. Well if you think that, you would actually be wrong. I kind of baited you into that one. The truth is pulling your score for a mortgage won’t hurt it like everyone tells you.
Lenders pull a different type of credit called a mortgage pool and it shows up that way to the three credit bureaus. So when multiple credit card polls might hurt your score, the same isn’t true for mortgage polls. This misconception about credit polls leads to the big issue people don’t pull credit soon enough.
They wait until they’re sure they’re ready or maybe once they’ve found a home. So many times when they are ready and do pull their credit they find some inaccuracy that would have been super easy to fix a few months prior but now that there’s no time and they’re stuck getting a worse deal because these things can take time to fix the next mistake.
With credit is closing old credit cards you just worked your tail off to pay off a credit card debt you ran up in college on Totino’s pizzas and Taco Bell, like me, so now that it’s paid off you close the card. Oh no, you just lost all that positive history of payment and your score will likely drop. If there’s no annual fee, don’t close it. Beyond losing the payment history, your score also looks at how much credit you’re using versus what you could use. If you close an empty card, it raises the percentage of what debt you have versus what you could actually borrow. This is called credit utilization and closing your credit cards will increase this ratio and lower score.
In most cases another mistake we often see is people opening up new lines of credit. This has a couple different ways it can affect your score negatively. When you open up a new trade line like a credit card, often this will cause a temporary drop to your score as the algorithm is wondering what you need the money for and it dings you.
Second, its new payment could kick you out of being able to afford the home in the range you want. A great example and one of the biggest mistakes people make is they buy a car right before they plan to buy a home. If your car payment is 500 a month, that’s 500 you can’t use towards your home payment. Wait until after you buy a home to make that car purchase.
The last mistake people make with credit is to pay down a bunch of debts without talking to an expert first. Why would this ever be a negative? Well, I’m glad you asked. Each loan type has a different required down payment to get the best
deals and sometimes it makes sense to use those funds towards the down payment than it does in paying down debts.
A good loan originator will be able to put both of these options side by side and typically it’s very clear which option is going to put you in the better scenario and save you the most money.
My last mistake I see might seem like an obvious one but you’d be surprised how often i’ve seen this one happen. Once you’re putting in offers to buy a home make, sure you don’t write the contract too close to a vacation. People buy a lot of homes in the summer and they take vacations in the summer too. So it makes sense that these would overlap sometimes.
Avoid this at all costs when you have a home under contract. Make sure you’re in town, if at all possible. This is because there are steps in the process you need to be available for like inspection and document collection. More importantly, don’t set the day of closing date one day before you leave for a trip.
The home buying process isn’t a perfect one and sometimes things out of your control will happen and dates might need to move. You don’t want to have to decide between a dream vacation to Hawaii and a dream home. Leave room between these in case something comes up.
Nick, nothing’s gonna happen. Our lender is a rock star. Okay, well what if the hail storm runs through the week of closing and the current owner needs to fix the roof? This has definitely happened and you’re not going to have a good time on that Hawaii trip. I promise you that if you have more questions on these see the description below and if you’d like to get more information on how to make your offer the strongest watch this video.

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Spire Financial (A Division of AmeriFirst Financial Inc.) brings lending expertise to you. All of our loan officers offer personalized communication for every client, guiding them through the process. We can show you ways to maximize your finances and unlock future opportunities. Spire Financial keeps you in control of refinancing, debt consolidation, and home equity. Together, we can achieve your financial goals.



V.I.P. Mortgage, Inc. DBA Spire Financial does Business in Accordance with Federal Fair Lending Laws. NMLS ID 145502. For state specific licensing, visit www.vipmtginc.com/national-licenses/. V.I.P. Mortgage, Inc. is not acting on behalf of or at the direction of the FHA/HUD or the Federal Government. This product or service has not been approved or endorsed by any governmental agency, and this offer is not being made by any agency of the government. V.I.P. Mortgage, Inc. is approved to participate in FHA programs but the products and services performed by V.I.P. Mortgage, Inc. are not coming directly from HUD or FHA. Information, rates, and programs are subject to change without notice. All products are subject to credit and property approval. Not all products are available in all states or for all loan amounts. Other restrictions may apply. This is not an offer to enter into an agreement. Not all customers will qualify.

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