Congratulations! You’ve been pre-approved and now the home of your dreams is under contract. Everything’s going swimmingly and you are probably just dying to move in and get going on your future in a brand new house. However, you have to remember that the house isn’t quite yours yet and you don’t want to accidentally do something that will delay your move in. Here are ten things you should avoid doing in order to actually get into your home in a timely fashion.
- Don’t apply for a new credit card. When you apply for a new card, it affects your debt-to-income ratio and your credit scores which will mess with all the numbers your Loan Originator calculated for you.
- Don’t buy a new car. This will also mess with your debt-to-income ratio and you’ll be stuck at a home buying red light for longer than you’d like.
- Don’t buy furniture before you own the house. It’s best to wait until you own the house and have a better idea of your budget before going on a furniture shopping spree.
- Don’t change jobs. It may present better pay and a better opportunity, but it could also delay the home buying process.
- Don’t close any credit accounts. It sounds like a good idea to clean up your finances by canceling unused credit cards and transferring balances to other ones to get a lower rate, but don’t do it, not yet anyway, as it’ll drop your credit score.
- Don’t get behind on payments. It’s so important that you stay on top of all of your payments to continue to prove that you’re creditworthy.
- Don’t move any money without a paper trail. Your lender is going to need documentation of all of your transactions in order to make sure you really have enough money for this house.
- Don’t spend your savings. You will need cash for your down payment, closing costs, and other various fees, so it’s a good idea to hold on to your savings until after you own the house, even if you don’t think you need it all.
- Don’t switch banks. Once your funds have been verified, leave them where they are.
- Don’t change your marital status. It affects your title. Avoid it if you can but if not, make sure you make your lender and title company aware of any changes so the documents can be correctly prepared.
I know, it’s all so much to keep track of, and your brain’s too excited to keep it all straight. If you have any questions or you’re ever unsure, talk to your Loan Originator. They are here to help make your dream of homeownership a reality.
One of the biggest things that deters many first time homebuyers from going out and buying a house is student loan debt. The pressure on millennials and the younger generation to go to college and obtain a degree has left many young people tied to a large amount of student debt. Many of these buyers choose to wait until they’ve paid most of their loans before buying a house, but all hope is not lost if you’re still under the thumb of your student loans. Sure, buying a home can still be a challenge, but it’s not impossible.
The main issue that student loans present to the home buying process is that they are included in a buyer’s debt-to-income ratio (DTI). DTI is the percentage of monthly income that is spent on debt payments including mortgages, car loans, credit card payments, and student loans. This ratio helps lenders to determine what size mortgage you can take on or if you can even afford one at all.
Of course, not all loans count your student debt the same. For example, VA and FHA loans will not include a student loan in your DTI if the payments have been deferred for at least 12 months, but any student loans will be included in a conventional loan whether it’s been deferred or not. Even then, there are different ways that this debt will be looked at depending on the type of home loan you apply for, so it’s important that you talk to a lender before giving up on the idea entirely.
There are many things that lenders look at when you apply for pre-approval. On top of your DTI they also look into your credit score and your potential down payment. These things, when paired with your student debt, could still approve you for a reasonably sized home loan. The real issue is finding out if you can afford a mortgage payment, and while you might say, “yes,” your lender might say, “no.” Save as much and as often as you can, pay all your bills on time, keep your credit score up, and work your debt down as much as you can and you will still be able to obtain a home loan even as you sit on student debt.
It’s important to understand the impact your loans have so that you can adjust your needs and work with what you have. Student loans are an obstacle, but if you have a plan for buying a home you can overcome them.
Homebuyers opting to buy multifamily style housing (condos, townhomes) do so for reasons that include budget, location, lifestyle, convenience, and the prospect of less maintenance. When considering what type of multifamily home to buy, however, it pays to do a bit of homework on these different types of purchases.
An empty nester looking to downsize will often go from a single-family house to a condo or townhome. A condominium (condo) is a re-sellable unit within a larger structure, sometimes several stories and often within a high-rise building. They may feel like apartments because of shared walls and elevators, but the space inside their unit is their own, and not a landlord’s.
Of all the types of multifamily homes on the market, condos require the least amount of maintenance. While you need to maintain the interior of your own unit, a leaky roof, peeling paint, window replacements, and garbage pick-up are left to the property manager or condo association to fix using funds from the monthly maintenance fees you pay. The more amenities in the building or on the property, the higher the maintenance fees. Many homebuyers buy condos so they may dispense with gym memberships, instead opting to use the complex’s pool and fitness center.
Along with all those privileges come restrictions, however. Even though you buy the air between the walls of your unit, you may not be able to customize it the way you want. Privacy may be compromised as well, since living is fairly close-in and all amenities are shared with others.
By contrast, townhomes are small-footprint dwellings, using multiple floors and shared exterior walls with neighboring homes within the community. Some townhouses offer small yards or patios but can be much less expensive than single-family homes with bonafide yards.
For many, townhomes are a great choice. You usually get more space than a condo offers and townhome communities generally allow property owners a bit more autonomy when it comes to things like the color of your shutters or front door, even though HOA-approval would apply. Many townhome communities offer proprietary garages within the same unit and share garage walls only, making the privacy aspect a bit more palatable.
Townhouse and condo complex maintenance fees can increase over the years as the property ages — something to be considered before purchasing. To make the right choice, consider your budget, how much square footage you’ll require and how much savings you’ll have to put toward things like repairs and maintenance.
Both these types of home purchases are often location-based as well. The closer to city amenities you are, generally the more costly the property of any type. Eliminating a commute, and walking to shops and restaurants as well as entertainment are all attractive qualities of many multifamily locations.
Moving is stressful and packing is probably the hardest part once you’ve actually found a home. There’s so much to do and keep track of that it can really drive you up a wall, but knowing a couple of Dos and Don’ts can bring you some ease to the process. Here are some of the major Don’ts of packing that you should try your best to avoid.
- Don’t Keep Using Your Kitchen. You’re not going to want to leave your kitchen to be packed up last, and trying to leave out what you think you’ll need will give you a headache. Get some paper plates and silverware and either make a few meals ahead of time and store them in disposable pans or order out those last few nights and have your kitchen ready to go days before the move.
- Don’t Wait to Declutter. You’ll want to start to decluttering weeks ahead of time to weed out all those things you no longer want or need. It’s way easier to get rid of things than it is to pack them, and you’re not going to want to sift through stuff you really don’t want to unpack your real belongings in your new home.
- Don’t Be Afraid to Mix Genres. Working to sort and separate your stuff into highly specific categories will stress you out and waste your time. Instead, pack a box for stuff that all came from the same place and label it with its former location like, “Top of Bookshelf.” This way you can put all of this stuff together and still know exactly what’s in there. Plus, it’ll all go in the same place which should make unpacking the box easier.
- Don’t Buy a Million Boxes Right Away. There are a lot of different places you can go to pick up boxes for free. Ask friends who recently moved or ask your job if they have any left from recent deliveries. Sometimes even local businesses are willing to give you what they have, so don’t be afraid to ask. It could save you a good deal of money!
- Don’t Recycle Your Newspapers. At least not yet. You can save money on bubble wrap and packing supplies if you stack up on all of your paper recyclables. Wad it up and wedge it between breakables or use it to fill extra space so your items don’t shift in the box.
- Don’t Use All Your Linens to Pack. Another very helpful packing tip is to use your towels and such instead of buying bubble wrap, but be careful with this. It’s important that you leave some out so that you can take a shower after a long day of moving without needing to dig through your dishes to find a towel.
- Don’t Over Pack Your Boxes. It may seem tempting to throw as much as possible into one box in order to get the whole thing done faster, or packing a whole lot of heavy things in the same box because they go together, but this will backfire. You could end up with broken boxes, squished valuables, or horrible back pain, so take your time and disperse your belongings carefully.
- Don’t Forget an Essentials Kit. You’re not going to want to do all of your unpacking on that first night, but you are still going to want to be comfortable. Pack a separate bag or box with your toiletries, shower stuff, sleep stuff and some clothes as well as paper plates, basic cleaning supplies, and chargers so you don’t have to sift through all of your boxes right away.
- Don’t Refuse Help. If friends or family come forward and offer to help you move, don’t turn them down. Sure they may not know where you want everything to be and you may feel that you’ll just get stuck fixing every little thing they do, but help is help and they will keep you from losing your mind in the process.
- Don’t Label Boxes “Misc.” You’ll hit a point of desperation where you’ll just start throwing what’s left into boxes and that’s ok. However, you’re still going to need to find and unpack this stuff later, so just writing, “misc.” on the side may not actively help you very much. Pick something specific in the box like and add that to the label like “misc. and serving bowls.” That way you can jog your memory about what’s in there before you open it up.
It seems like a no-brainer. You’re a handy person, and you’re simply building a little screened porch onto your family room area. None of your neighbors can see it, and it’s not going to have anything more inside except for a few electrical outlets and a ceiling fan. Plus, maybe some vinyl planking, walls, and windows. Even the roof is just corrugated metal. You’re following the instructions on a YouTube DIY video, and it’s going great so far.
But what happens if you get caught without a building permit? Can you get in trouble for this very straight-forward and unobtrusive project? Why do building permits exist in the first place? Changes to your home go on the record because it’s important that homeowners do things correctly, following the current safety codes for electrical, plumbing, and structure. Doing it wrong could mean exposed wires, short-circuiting, and extensive repairs that could translate into thousands of dollars in damage. Worse yet, potential damage to your neighbors’ property as well.
Failing to follow the rules and get signed off on some projects may mean having to rip it all out and start again when selling your home after an inspection is done, costing hundreds to thousands of dollars. Even if you have an inspector enter your home to sign off on a permitted project, they may notice something else amiss with another part of your house. You may or may not have been the person who did the work, but that doesn’t matter to them. All that matters is the structure. If they research and discover non-permitted work was done, there may be consequences. Trying to sell a home with non-permitted rooms or work may also find you have to reduce the price of your home significantly. Realtors may not include non-permitted bedrooms and baths (or the correlating square footage) in their listings and must disclose the anomalies in the listing description in most states. In some areas, even removing the closet in a given room to make it into an office means you’ve automatically lost a bedroom in the count.
The general rule of thumb is that structural, electrical, plumbing or mechanical work will require a permit, but here is a breakdown:
Installing fencing or repairing it is something you would not think requires a permit. But there are height restrictions in many locales. Especially if you have neighborhood rules about aesthetics. Installing a fence that does not match those around it, you might be forced to take it down and start again. Check with a local fencing contractor, even if you are doing the work yourself.
If you are installing windows that are larger than the current opening, a permit is required. Even a retrofit for newer windows may require one. You won’t know unless you call your local building permit office. Same for skylights and new doors. There are several reasons for this, including energy calculations for how much glass exposure your house is permitted without having to upgrade your HVAC system.
As for plumbing and electrical work, you’ll need permits when installing or replacing wiring for an outlet, a ceiling fan or overhead lighting — especially recessed or can lights. Smaller projects like repairs and light fixture switch-outs probably won’t require it. As for plumbing, codes often change, which means you usually can’t just replace pipes and fittings with the same kinds that have been in your house for decades. A plumber can tell you what is being used now.
Structural changes are without a doubt the most noticeable renovations you can make to your home — things like changes to any load-bearing walls, adding or repairing balconies, decks, porches, roofs or foundation flooring. Additions, new construction, remodels, repairs, replacements, and upgrades totaling $5,000 or more will require a permit, including detached structures like garages, sheds, and platforms. Exceptions to this rule include construction less than 200 square feet.
As for heating and cooling, the person you hire to replace your water cooler will get a permit for you, as will the contractor making changes to your heating and air conditioning. Changes to the ventilation system, gas and wood fireplaces and ducts will also require a permit. This does not include filter changes, motor lubrication or equipment cleaning.
So, what can you do WITHOUT a permit? Plenty. Replacing flooring, doing minor electrical repairs, installing new countertops, replacing bathroom fixtures (faucets, showerheads, painting and wallpapering, as well as landscaping work, are all exempt from permit requirements.
The best rule of thumb is to with check with or hire a professional, who will have the experience to determine if your project requires an inspector to check for any red flags afterward. Professionals are always under strict scrutiny by the areas in which they do their work and will usually be the ones to procure the permits. They understand the bureaucracy, know the personnel at city hall, can do the paperwork in their sleep, and will no doubt take less time to get the job done.
Source: Redfin, Smileyfirm, TBWS