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7 Mistakes Home Buyers Are Making Right Now

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2023 has been a challenging year for home buyers, especially if you’re looking to buy your first home! To help you make informed decisions, here’s a list of seven common pitfalls to avoid when buying a home.                 

1. Just Getting Pre-Approved

In today's competitive real estate market, standing out as a home buyer is not just an advantage; it's often the key to success. That's why we put our buyers above the competition by making them a Churchill Certified Home Buyer. Being 'pre-approved' is good, but 'certified' is best! 

Buyers who don't take advantage of programs like these could have a much harder time even getting their offer considered by sellers. Michelle M. from Norco, CA said, "By becoming a Certified Home Buyer prior to finding a home, it allowed us to close escrow in less than 30 days!"

2. Waiving Inspections

To compete with other offers, some buyers have been willing to waive their home inspection contingency altogether. A home inspection contingency allows a specific time period for the buyer to inspect the home for issues, withdraw their offer, and get their deposit back if necessary. Waiving this inspection could be a big mistake if there are significant issues with the home, such as mold, foundation issues, water damage, etc. 

Instead of risking buying a home with extensive damages, give the seller an offer they can't refuse: $10,000. How? With our $10,000 Seller Guarantee! Here's how it works–if your loan falls through due to financing issues, we will pay the seller $10,000. Entirely risk-free for you, this guarantee is sure to entice sellers and put you ahead of the competition.

3. Buying More House Than You Can Afford

Buying too much house can be tempting, especially when you're enticed by a beautiful home in a desirable neighborhood. But overspending on a home can put you in financial jeopardy, stretching your budget thin and impacting your quality of life. If you're a first-time buyer, consider a starter home. It may not have every feature you want, but it allows you to start building equity without breaking the bank.

"I absolutely recommend someone get clear on the math before getting emotions involved," says Churchill Mortgage California-based Managing Partner Mike Hardy. "A lot of people spin their wheels getting excited and putting an agent to work, only then to discover a home was out of their budget from the get-go."

4. Getting the Wrong Mortgage

Your mortgage isn't just a loan; it's a financial strategy for building wealth and investing in your future. The loan you choose will depend on your unique financial situation and your long-term goals. So, don't rush into just any loan–connect with a Churchill Home Loan Specialist to help you figure out your options. At Churchill Mortgage, our mission is "doing what's right for you," which means getting you on a smarter mortgage plan. We will work with you to establish your financial goals and a smart pay-off plan. 

5. Assuming You Need a Credit Score to Get a Mortgage

Did you know you don't need a credit score to buy a home? With a no-score loan, buyers who have taken on zero credit can be approved for a mortgage through manual underwriting. It's important to note that having absolutely no credit score is very different from having a low credit score. If you have a low credit score, it's best to focus on repairing your score before applying for a mortgage. 

If you have a credit score of 0 after paying off all your debt, contact us today! We specialize in no-score loans specially designed to keep you on track for debt-free homeownership.

6. Taking on Credit While Closing

A new report from the Federal Reserve Bank of New York shows that Americans have officially brought credit card debt to over $1 trillion. Plus, in Q2 of this year, 7.2% of credit card accounts were 30 days overdue. Credit card debt is on the rise, and buyers should be aware of how their credit can impact the closing timeline. You should never open a new line of credit during the home buying process. Why? 

  • Your credit score could take a hit, leading to a higher rate
  • It can increase your DTI (debt-to-income) ratio
  • It makes you look higher risk among lenders
  • It could delay your closing timeline

It’s important to avoid new lines of credit and making big purchases until after you've closed on your loan. 

7. Focusing on the Market Too Much

In the quest for homeownership, it's easy to become fixated on the ever-fluctuating housing market. However, there's a valuable lesson to be learned: Don't let the housing market steal the spotlight. The housing market is notoriously unpredictable, and focusing on trends can lead to missed opportunities. Instead, buy the home and rent the rate– that means buying a home when you're ready and refinancing later once rates go down. 

Remember to do your research, calculate the numbers, take your time, and, most of all - do what feels right for you. Want to know how much you can afford in today’s market? Try our free calculator or get in touch with a Home Loan Specialist today!

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