Low prices conjoined with record low mortgage rates have made buying a home or investing in a property more attractive for those interested.
Unfortunately, many transactions fall off the map, some buyers are unable to meet the standards and qualification for mortgage loan financing and others just cannot get any of their offers accepted.
Buying a house in today's market takes quick action, a pot full of gold for luck and a lot of planning.
According to Zillow, here are 8 common pitfalls that could be keeping you from stealing the deal:
- You have large cash deposits but no paper trail: be prepared to source all incoming cash into your bank account. All deposits and transfers from other accounts will also need to be sourced.
- Your gift money and/ or down payment cannot be sourced: If you are getting money from your parents to purchase the house, you need a signed gift letter to prove is money truly is a gift and full bank statements of your parents account to prove that they had the funds.
- Your debt-to-income ratio is above 45 percent: DTI is the amount of a new monthly house payment plus other reoccurring monthly debt divided by your gross monthly income. Calculate your income to make sure that the ratio is at 45 percent or below.
- You're self-employed and show losses on your Schedule C: You cannot have your cake and eat it too when it comes to taxes and expect to qualify for the maximum house price. If you file your taxes on a schedule C, be prepared to show some strong figures to your lender.
- You need a seller credit for closing costs: Many buys, especially first-time home buyers are short on cash and need seller concessions for closing costs.
- You're indecisive: Shop for your own loan before making an offer on a house. If your offer is accepted before you choose a lender, you will be forced to commit to working with a lender or if worse comes to worse, cancel the contract if you cannot meet obligations.
- Youre competing with multiple offers and stronger buyers: How do you win a competition with top buyers? Start by asking your lender to close the transaction in less than 30 days. That will help you when it comes to negotiating.
- You have unrealistic purchase price expectations: This always happens. Buyers know what they are looking for and what they are willing to pay for it. Know what you want and understand that it might cost a little more. A good real estate agent should be able to advise you and point you to the house of your dreams.
