What not to do before buying a house?

Not keeping tabs on your debt

A credit score is significantly important before buying a house. And a poor credit score may become a risk for your mortgage application to be rejected even. Therefore, if you have a poor credit score or have other credit issues such as late payments, non-payment, debt collection actions, or even significant debt, a mortgage lender might offer you a less than ideal interest rate or reject your application altogether. Either situation can be frustrating and may put you on hold.

Another commonly observed habit is that once the mortgage lender issues a pre-qualified letter, they are good to go. This is not true. Lenders can revoke a mortgage commitment, if they feel so. Therefore, before starting the search, tackle the potential problem in advance.

Don’t max out your credit card limit

Maxing out a credit card is one of the awful mistakes for your finances but doing so before closing a home loan deal is the worst. The extra debt payment amount can offset your income and result in qualifying for less mortgage financing at an inappropriate interest rate. It can also lower your credit score, which could also increase the cost of your loan.

You must be clear about one thing that the actual debt amount is something else and it does not matter even – you could owe £2,000 or £20,000. The important thing is how much you can owe relative to your credit limits. If you owe £2,000 to the lender on a card with a limit of £2,500, your card is nearly maxed out and drastically reduce your credit score – resulting in a higher interest rate and monthly payments, when it comes to applying for a mortgage.

Avoid changing jobs

Consistency in your employment career is essential, while applying and getting approved for a mortgage loan. It is a key pointer for a lender to check before issuing you a pre-approved letter. It is because a lender wants to be sure about your financial stability and your capability of repaying your loan payment, in time. Job changes during the crucial time can create serious issues, especially if your pay structure changes from fixed monthly salary to commission – as it would not have any record of earnings.

In short, changing your job before applying for a home loan, make you less appealing to a lender. Keep your plans postponed until after the closing takes place.

Making an offer without getting pre-approved

Mostly, when new buyers start the house buying process, they think that they should find their dream home first and then switch to the mortgage step. Apparently, it may seem the right option but logically, when you find a perfect house to make an offer, you cannot waste time. If it is an investment-worthy option, you will have to face competition from other buyers and their multiple bids.

In such a competitive property market, sellers are unlikely to consider offers from buyers, who do not have a pre-approval letter from a lender. Moreover, if you have a pre-approval letter, you will be realistic about your choice because you know what you can afford.

Pre-approval letter: A pre-approval letter by a lender is proof that the lender is sure about your means to pay the bills, based on credit history, credit score, employment stability, income, financial assets and other key financial factors.

Do not over-extend yourself

Based on your credit history, credit score, employment duration, and your monthly salary, a lender may be ready to offer you, what they think you can afford. They may have stretched your limit to max, which does not necessarily mean a figure of what you will be comfortable living on day to day basis.

A few buyers make the same mistake of over-extending themselves. However, they will end up paying for the home mortgage only and never be left with any budget to comfortably do anything else. Not even a nice dinner, sometimes! Therefore, whatever a lender commits to you on paper, do not forget to see what you are comfortable with.

Not shopping around for a mortgage

House buying is an exciting thing to begin with, and once you start looking around, you get too thrilled to overlook several steps. One of them is shopping for a mortgage loan and speeding up the process. In this scenario, you are usually perplexed so you either apply with one mortgage lender, and move forward as soon as you get approval, or you apply with more than one mortgage lender and instead of waiting for approval from others, you carry out with the first option, once you have been approved.

This is a huge mistake.

And the logic you may present is that in a given market, the lenders’ rates are very close in price to others but some lenders may offer you a mortgage loan at a better interest rate. You may not feel it now but getting a huge loan at a higher interest rate can be very expensive in the long run. Be sure, to shop around and get written quotes from different mortgage lenders.

Not hiring a real estate agent

Searching for an ideal location and buying a house in UK on your own can be time-consuming and equally complicated, at times. A professional **real estate agent **in UK cannot just help you narrow down your choices, but find you a perfect location, and spot an ideal house at a reasonable price.

If you still think to proceed without an agent, a seller’s agent may offer to represent you. And at this stage, you may consider this option but the seller’s agent cannot have your interest in mind because his goal is to bring the best offer at the highest bid for his client. Hiring your agent can help you in numerous ways because his interests are more aligned with yours. In this way, you will be in a position to make better and more well-informed decisions.

If you have already started your search in the UK housing market or planning to begin it soon, you can take help from the team . We are professionals, have years of experience, and have a curated list of houses in UK, from where you can pick the one that meets your needs and fits into your budget.

Do not wait and pick your phone to contact the team Copperstones at +44 203 888 5555 or write us your query at enquiries(at)copperstones(dotted)net and we will get back to you with a bespoke investment plan, tailored according to your requirements.