After spending weeks or maybe months searching for the perfect house, the last thing you want is to find out you can’t buy it after all. There are several mistakes home buyers often make that land them in this situation, most of them financial mistakes. To help you avoid making these mistakes, here are 4 things you shouldn’t do when buying a house in Kauai.
1. Don’t Overreach and Don’t Be Emotional
The most common mistake buyers make when buying a house in Kauai is overestimating what they can actually afford and buying too much home. When this happens, they wind up with very financial wiggle room and so are perpetually on the edge of defaulting on their mortgage loan and facing foreclosure. To avoid this you need to do two things. . .
First, be aware that the cost of buying a house goes far beyond your monthly mortgage payments. You also need to factor in these one-off and recurring costs:
- Closing costs
- Attorney fees
- Repair/maintenance costs
- Property taxes
- Homeowners insurance
- HOA fees
- Private mortgage insurance
The other thing you need to do is avoid letting your emotions rule your decision-making. Falling in love with a home on an emotional level can keep you from objectively assessing affordability. Your agent can help you avoid this mistake and can keep you on track. To discover more about this, contact a Kauai agent at 808-634-4518.
2. Don’t Damage Your Credit Score or Open a New Line of Credit
And when buying a house in Kauai, you shouldn’t do anything to damage your credit score or open any new line of credit.
Remember that any time a business checks your credit score, your score takes a little hit. These little dings may not seem like much, but they matter when your score is borderline. If, for example, you are trying to get preapproved for a mortgage loan and your score barely meets the minimum requirement, every point counts.
Similarly, don’t open a new line of credit – even if the purchases you open a line of credit for seem like necessities. For instance, you may be tempted to buy new furniture to outfit that new home you’re about to buy. But if you don’t have the cash on hand, you’re better off waiting. If you open a new line of credit, it could throw your debt-to-income ratio out of whack, and then you may not qualify for the mortgage.
3. Don’t Miss or Be Late on Payments
A related thing you shouldn’t do when buying a house in Kauai is to miss or be late on any payments. Even an oversight here can damage your credit. So be sure to pay bills on time.
Suppose you are paying on a current mortgage. If you miss a payment, it could have serious consequences for your credit and your ability to buy the new house. It could make you ineligible for a loan for at least a year with most lenders.
You shouldn’t even miss making payments for less significant things like utility bills. Even if you miss a payment months prior, it could still jeopardize your chance of securing financing for buying a house in Kauai. And if a missed payment doesn’t lower your credit score below the limit, you still may have to re-apply for a mortgage loan, and the delay could cause you to miss out on the home you really want.
4. Don’t Change Jobs
When buying a house in Kauai, you should definitely avoid changing jobs. Even a move up to a better job could hold you back. Any change in job status could cause your lender to question your financial stability and so consider you a greater risk.
Certainly, going from, say, full-time to part-time or from salaried to commission will raise red flags with your lender. But industry pros als0 advise that while moving in the other direction to a better position shouldn’t impact your closing, it’s still better to remain in your current position.
Bonus: Don’t Fail to Work With a Kauai Agent
A final thing you shouldn’t do is fail to work with a good local agent. Your Kauai agent can help you avoid the missteps laid out above as well as the many others that litter the path toward buying a house. And we have the agents who can provide the critical guidance you need. Contact us today at 808-634-4518 if buying a house in Kauai is in your sights.