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Purchasing - What Not to Do

Things You Should NOT Do When Purchasing a Home

1. Don't change your job before applying for a home loan.

Also, now is not the right time to become self-employed or to quit your job.

2. Don't buy a new car -- now is not the time.

Financing any form of transportation with a loan increases your debt to income ratio. When applying for a mortgage, it's best to wait.

4. Don't buy furniture on credit before purchasing a home.

Buying new furniture increases your debt-to-income ratio. If your ratio is excellent, there should be no problem. And if there's money in your bank account, this should not affect you. However, it is best to save your money and buy after closing. Of course, you need a bed to sleep in, so don't neglect the necessity for creature comforts.

5. Don't be late on your credit card payments or charge excessively.

Your credit report is a picture of how you spend your money, so take responsibility so lenders can see how you manage your money.

6. Don't make large deposits into your bank accounts. Lenders check for what is termed "seasoning", where you can show funds have been in your bank account for a couple of months. Gifts that do not have to be paid back are fine, but lenders may worry you borrowed the money which is not permitted in mortgage lending.

7. Don't lie on your loan application. Tell the truth on your application. Fraud is not taken lightly on mortgages. It's against the law.

8. Don't co-sign a loan for anyone. If you co-sign for someone else, this will increase your debt-to-income ratio, and you also become responsible if the debt goes unpaid; this can hurt your chances of getting a mortgage.

9. Don't apply for new credit cards or personal loans while applying for a mortgage. If you open new credit card accounts or obtain a personal loan, it shows more debt when underwriters review your application. Also, when you apply for a credit card, an inquiry appears on your credit report and can temporarily reduce your credit score up to five points. It's just not a good idea to take out new credit when applying for a mortgage loan.

10. Don't spend money that you will need for closing costs. Closing costs are a huge part of a new mortgage on a home that you need to consider. Be sure to hold money aside for closing costs that you'll lay out of pocket on a purchase.

What Is a Home Appraisal?

An appraisal is an unbiased professional opinion of a home's value. Appraisals are almost always used in purchase and sale transactions whether residential or commercial. They are commonly used in refinances. An appraisal is used to determine whether the home's value or contract price is appropriate when considering the home's condition, its location, and its features. Lenders who are refinancing a home are not going to lend a borrower money until they know that the home's value is worth the financing being provided.

Get an Engineer's Report

Engineer's Inspection

This is a visual survey of the conditions of a home by a licensed and certified engineer. What examinations are done? The engineer examines the following: the foundation, the building structure, the interior, the exterior, the electrical system, the plumbing system, the mechanical heating and cooling system as well as insulation and ventilation issues. It can take a few hours to complete the inspection.

Engineer's Report and Appraisal-What's the Difference?

An engineer's inspection focuses on the structural condition of a home whereas an appraisal required by your lender focuses on the value and the condition of the home.

WHAT DO ENGINEERS DO?

Engineer's reports are not required by lenders. But getting an engineer's report is key to making the right decision when purchasing. Engineers inspect the foundation, the the walls, the ceiling, the floor structure, and the roof. The purpose of this inspection is to make sure load paths and the passing of time have not caused any post-construction building problems. Engineers perform floor level surveys; mapping out the roof and ceiling framing; mapping out the foundation and floor framing, and documenting the locations of physical damage such as drywall, plaster and brick veneer cracking. The results of the evaluation are presented in a report complete with photographs and drawings and other information. A structural inspection is especially important in the purchase of a home so you can be assured there are no structural defects you aren't unaware of prior to purchasing the home.

FINDING THE RIGHT LOAN

Do Sellers Generally Make Repairs?

It's About WHO Will Do the Repairs

Many sellers are not keen on fixing costly and time consuming repairs revealed on an inspection or engineer's report. You may have an eager seller that makes your life easier and is compliant, but buyers are not always in the frame of mind to fix something on a prospective house when they can buy a house that doesn't require repairs. Now, if the costs are not too high, there are sellers who will consider fixing items found in the report. Things like caulking a bathroom tub, lights or fans that don't work, and things that don't require a lot of effort to repair or replace are some things a seller might agree on doing. But putting in a new AC unit or a new furnace might not be things they would be willing to do. They would rather leave that up to the buyer.

What is Essential?

If there are safety issues such as mold in parts of the home that are removable or electrical panels that can be fixed, something that could cause danger to the prospective homeowner or impose a future liability on the seller, the seller might make a move to do the repairs. Painting rooms, replacing carpet that you do not like are not things the seller would relish doing in order to sell his home. Now, that doesn't mean he might not spruce up his house just to sell it, but cosmetic changes or things you don't like are not going to be items that sellers jump at the chance to change. In other words, pleasing you has a limit.

Make a Short List

Don't go to contract signing with a list a mile long of things you want fixed. If you are negotiating a sales price with a seller, it's entirely possible he may reduce his price so you can do repairs yourself after you close. But some of the items on your list may very well encourage the seller to do what you are asking if he truly wants to sell his house. Repairs that are deemed essential can be easier to convince a seller to fix. Safety issues such as upgrading electrical panels or defective outlets or removing mold can generally get a homeowner to budge because the repairs would prevent harm to the buyer and future liability for the seller. Requests for repairs that are non-essential such as worn-out counter tops or new paint in a bedroom might not be greeted as enthusiastically by a seller.

Closing the Deal Sooner Rather Than Later

Sellers want their homes sold as quickly as possible. If you make a solid offer that is not outrageously reduced, you have a good chance of getting that home or at least negotiating a better price.

Also, if you are pre-qualified and can prove to the seller that you are a worthy candidate for a mortgage, the seller may go the second mile to do some of the repairs you placed on your list. It all depends on what type of market exists at the time. If it's a buyer's market, the seller may be easily moved.

There's an old saying, "pick your battles". So be smart, be wise, and there's a good chance you'll get that house if you keep up your confidence and just go for it!

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Home Ownership Studies

Data show that single women in the United States are more likely to own homes than their male counterparts.
A recent LendingTree study found that about 13 percent of single women own homes, compared to 10 percent of single men.
Some experts say women’s greater longevity and caregiving responsibilities may be contributing to that difference.

Single women in the United States are outpacing single men in homeownership.
A 2023 Pew Research Center survey using 2022 census data found that single women owned 58 percent of the nearly 35.2 million homes owned by unmarried Americans, while single men owned 42 percent. A recent study from Lending Tree showed a similar — though smaller — gap, finding that around 13 percent of single women own a home, compared to about 10 percent of single men.
The reason behind this disparity in homeownership is unclear.
Housing researchers believe it could be linked to women’s longer life expectancy, disproportionate caregiving responsibilities and—in the case of younger women in particular—a narrowing gender wage gap.
The Pew report attributes the difference to the number of older women who outlive their partners.
Homeownership rates among unmarried adults rise with age, according to the report. About 70 percent of single heads of households aged 65 or older own their home, compared to 44 percent of those between the ages of 35 and 44.
And women tend to live longer. The average life expectancy for men in the United States is about 73 years, compared to about 79 for women, according to the Centers for Disease Control and Prevention. Source: FastStats - Life Expectancy (cdc.gov)
“A lot of women tend to stay with the house when their husband dies, which typically leads to homeownership,” said Juan Gonzalez, an adjunct professor of finance and business economics at the USC Marshall School of Business.
Women’s higher longevity may not account for the full disparity, however.
While the Pew report found that the gender difference in homeownership rates was limited to older unmarried adults, the National Association of Realtors’ (NAR) 2024 annual homebuyer and sellers generational trend report shows single women bought homes at higher rates than single men last year regardless of age.
Overall, the NAR report found single women accounted for 19 percent of homebuyers, while single men made up 10 percent.
That difference is similar among several age groups, though it narrows among older Gen Zers and Millennials while widening among most older adults.
NAR’s Deputy Chief Economist Jessica Lautz told The Hill it’s hard to determine why single women are outperforming their male counterparts in home buying.
But she said women’s disproportionate caregiving responsibilities may have something to do with it.
“They’re more likely to be single moms, and they’re more likely to be purchasing a multi-generational home,” said Lautz. “So, they may have an elderly relative within that home as well.”
Women shoulder more caregiving work than men, research shows. Census Bureau Releases New Estimates on America’s Families and Living Arrangements from 2022 shows 80 percent of single-parent households are headed by women." Source: Single women are more likely to own homes than single men. Why? – The Hill

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