The market’s starting to heat up already here in 2021, and we’re seeing more action in the Calgary region than we’ve seen since 2014. Unfortunately, people are getting a little overeager and making some silly mistakes. Here are 10 you should avoid at all costs:
1. Don’t take advice from just anyone. Your Uber driver or go-to hairdresser are perfectly nice people, but their opinion on real estate isn’t necessarily correct. Make sure you’re working with a team of advisors who can boast a proven track record of success and point to lots of five-star reviews from raving fans.
2. Don’t change jobs or quit. I’ve had two different clients do this while buying a home, and it slowed down the process. Also, don’t switch your pay structure to contractor or self-employed status, as it can have the same effect.
3. Don’t make large purchases or seek other types of financing (e.g. car loans). If you’re planning to buy a washer, refrigerator, or a car to go along with your new house, know that it’s better to wait until after closing to do so. You don’t want to mess up your credit and debt-to-income ratio.
4. Don’t reduce your work hours or take unpaid time off. Since that will impact your income, it can cause a big problem for a lender during the financial review process.
5. Don’t use mattress money—i.e. a bundle of cash. Unfortunately, you can’t do this. The lender has to be able to source the funds to finish the loan. If you do have a bunch of cash lying around and want to use it for your home, deposit it and make sure it’s in your bank account for at least 90 days before starting the financial review process.
6. Don’t run your credit multiple times. You can run your credit multiple times while you’re shopping for a rate, but you want to do it within a 15- or 30-day period. Each of the three credit bureaus has different periods, and you should talk to your licensed lender first before making any assumptions about your time frame.
7. Don’t overuse credit cards. When you’re under contract, this can affect your credit score and debt-to-income ratio greatly. Keep your credit card limits where they usually are.
8. Don’t cosign on a loan. Whether it’s a home or car loan, don’t cosign while you’re in the process of buying a home. It’s another thing you’ll want to wait to do until after closing.
9. Don’t go on vacation during closing. You have to physically be at the closing table to sign some documents. Any delay in closing could jeopardize your whole transaction.
10. Don’t wing it. When using RRSPS for your down payment, there is a proper order to the process as well as rules that must be followed. If you have even a shadow of a doubt about something, you need to ask a qualified professional for more information.
If you have questions about these tips or anything else related to real estate, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.