It’s both exciting and a little scary to buy a home. That feeling of nervousness and not knowing what to expect is normal! That’s why it’s important to have a strategy from start to finish if you want to find the right home for you.
And part of that strategy is to avoid some common mistakes buyers can make. Here are six mistakes you now know you must avoid!
Mistake #1–Not knowing how much you can afford.
Think about monthly payments first and foremost, not just the purchase price. Next, get pre-approved by a lender BEFORE you start looking at homes. They may approve you for more than you are comfortable spending per month, so ask them to approve the monthly payments you want, which are not the highest purchase prices possible.
Ensure you understand the correlation between your purchase price, monthly payments, and the down payment required. This is different for every home buyer. Your friend at work might be able to afford a much more expensive house by putting more down, for example, so make sure you know your particular situation and look for homes accordingly. You should also consider not just the cost of the home but also utilities, repairs, and maintenance.
Mistake #2–Not realizing the wrong mortgage can cost thousands of dollars of needless interest.
You might qualify for an FHA mortgage, but you have HUGE monthly mortgage insurance premiums that drive up your monthly payments. Plus, some great loan programs available right now can save you hundreds of dollars a month.
For example, a 5% down loan where you don’t pay any private mortgage insurance. Many loan options are available these days; the “right” one is based on your particular financial situation and how long you plan to own your home. One loan definitely does not fit all, so do your homework and know the options and what the right choice is for you!
Mistake #3–Not discovering hidden defects before you buy a home.
Never buy a home without a professional home inspection. But even before you reach that point, YOU need to know the potential problems in the home. From the get-go, ask the seller questions such as: How old is the heating and air conditioning system? When was the roof last replaced?
There are often warning signs, such as water damage, that the seller doesn’t necessarily need to disclose, but you can see when you look at the home more closely.
Mistake #4–Not knowing how much your credit can affect your ability to buy a home.
You will need a decent credit score to get a low interest rate. Start monitoring your credit online about 3 – 6 months before you want to buy a home. You can go to websites like www.myfico.com and pull your credit for free. Do this early on, before you start looking at homes, so you don’t have any surprises.
Most credit issues can be repaired but it can take a few months, so if you aren’t monitoring your credit regularly, check it early on in the process.
Mistake #5–Not knowing about all the great first-time buyer programs out there from state and local agencies.
Don’t make this mistake! Many of these programs are only for first-time homebuyers, and you don’t want to miss out on this opportunity. You can reap HUGE savings! There are down payment assistance grants and zero percent interest loans. I can help you with these programs and connect you with lenders to determine your qualifications.
Mistake #6–Not asking questions if you’re confused or need clarification.
There are no stupid questions when you are making the biggest purchase of your life. Don’t hesitate to ask! I’m here to help you along the way and can educate you on the process from start to finish.
As you can see, you’ve got to be one step ahead when it comes time to finding your home in this market. This article shows you how to do just that so you’ll be prepared and avoid some unnecessary mistakes.
If you are considering buying a home sometime this year, reach out to me and let me know. It really comes down to planning and prepping WELL before you want to make a move.
Together, we’ll make a plan that works for you and your timeline and then put it into action when you say GO! This is just one of the ways we can make buying a home in this crazy market not just doable but actually enjoyable.
