Before the bank will foot the bill for a house, buyers will have to get past one very important person – the loan officer. This person is in charge of ensuring only financially stable people get a loan. To make this determination, they look at financial data like money for a down payment and closing costs, and whether or not buyers are able to regularly make their monthly payments. A lot of this work is done by reviewing bank statements, which is why it’s so important to get financial records in order before submitting a loan application.
Unexplained Large Deposits
Loan officers will check to see if there are any large deposits to your bank account that may seem irregular. While they won’t hold a sudden windfall of cash against a buyer, having multiple and sporadic large deposits can raise some red flags because it can suggest the money is coming from less than legitimate sources. If for some reason a buyer’s financial history has a lot of sudden spikes, it’s a good idea to have a good explanation ready.
Buyers will normally have to submit two months of bank statements with their application. If those statements are riddled with overdraft charges, lenders won’t be happy. This can be a sign a buyer doesn’t know how to manage their money well.
Another red flag that may get raised is personal loans from family or friends. If loan officers see the same amount of money going to the same person every month it can be interpreted as a non-disclosed loan. A common example is a home buyer getting a loan from their parents to buy a car or help pay for school.
If any of these red flags apply to you, don’t worry too much. In most cases, these issues won’t constitute an automatic rejection, but you might have to produce more financial records to appease the loan officer.
Asking the right question can make all the difference. This is especially true when shopping for a big ticket item like a car, or house. We want all our home buyers to be completely satisfied with their purchase, and that means no surprises after the papers are signed. To keep customers happy and surprises to a minimum, here’s a list of important questions home buyers should ask when buying a new construction home.
What are the plans for the neighborhood?
If the development is in the initial phases, it’s a good idea to find out what the builder plans to do with the rest of the property. Are they going to keep it a small community with just a few homes, or are they planning another 75 homes in the next year? The answer to this question can have an impact on your property value.
What are the homeowners association rules?
If your community has an HOA, make sure you know their rules and regulations and how much dues will be. Most HOAs are pretty harmless, but some have very strict rules on sheds, color of tarps, landscaping, and fences.
What options for finishes do you offer?
Finishes will make all the difference in a home. This can include the flooring, cabinets, light fixtures, countertops, and lots of other things. The finishes in the house will have a huge impact on the quality and price. Make sure you know all your options for finishes as well as the associated costs.
What is your warranty policy?
Every quality new home builder should offer some sort of new construction home warranty. These policies typically cover any workmanship defects for one year and structural problems for 10 years. Every builder will define workmanship defects and structural problems differently so it’s important to know up front what’s covered and what’s not.
Buying a new construction home is a little different than buying a used home, and buyers should educate themselves on these differences if they’re considering a new construction home. Thankfully, these differences aren’t too difficult to navigate once you know what you’re dealing with. If you’re thinking about buying your first new construction home in Tulsa, here are three things you should know.
Buying Before Building
One of the most unique things about buying a new construction home is you can buy the home before it’s even built. It might sound scary to buy a home you’ve never seen before, but this is why we build model homes. The purpose of a model home is to give home buyers a chance to walk through the floorplan they’re interested in and check out all the available features. While this won’t be the actual home they buy, it will give them a chance to try before they buy. The biggest advantage of buying before the home is built is you get to pick out different features and customize the home to your liking.
It’s Not Personal, It’s Business
When you buy a home from an owner who lived in the home and raised their family there, they will likely have some level of emotional attachment to the home. After all, they made so many memories there and it was a huge part of their life. This emotional attachment can sometimes lead to sellers inflating prices to cope with the emotions of selling their home. Buyers working with a custom home builder won’t have this problem. Since we never lived in the home, we have zero emotional attachment to the home. Our prices will only be influenced by cold hard numbers.
If this is your first venture in the new construction arena, working with a home builder who’s been around the block a few times is vitally important. Perry Hood Properties has more than 20 years of experience building new homes in Tulsa and we can help guide you through the process. Our team will treat you with respect and ensure you know all your options to help you make informed decisions.