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Top 10 Home Buying Mistakes
1. Overextending your budget
Buy a home that's way out of your price range and you could find yourself feeling pinched every month. Just because you have been pre-qualified for a certain loan amount and payment doesn't mean that that is where your comfort level lies. Plan for emergencies, entertainment, vacations, savings, furnishings and other amenities. Then take into consideration your future mortgage payment and all of your liabilities. That will give you a better idea of what kind of payments you can really afford.
2. Timing is Everything
Not planning the move to coincide with the end of their lease often creates a big dent in the budget. Check with your landlord about an early release or extension of your lease when you consider buying your first home.
3. Buying a House that doesn't fit
When buying your home, consider how long you plan on staying in that house. You don't want to find yourself in too much house or too little house. Plan for any lifestyle changes that may occur during that period and search for a home that meets your needs.
4. Buying a property that will be difficult to resell
When you buy, think about the day it comes time to sell. It's easy when you're house hunting to forget what it's going to be like to sell your home down the road. Most first-time home buyers sell within four to six years. Walk yourself through all the negatives and think of how you will sell the property prior to buying it.
5. Buying in a neighborhood you know nothing about
Does the neighborhood make you as happy as the house? If you don't like the location you'll be unhappy. What's more, you'll probably have a hard time selling your property if the community isn't good. Ask around, read, do some research on the internet. Gather such data as test scores, statistics on the percentage of kids who graduate and go to college, the student/teacher ratio and so on. Talk to neighbors and parents to find out what really goes on in the neighborhood.
6. Not Having a House Inspection
Everything looked just fine. How were you to know that the house had a termite problem, asbestos, a leaky roof, a cracked foundation and electrical problems. You would have known if you had a professional home inspection. A home inspection generally costs between $300 to $700 ---and is well worth it.
7. Picking the wrong mortgage
These days, many homebuyers are rushing to secure a mortgage as fast as possible. That's because sellers often only consider bids from individuals who have been pre-approved for a loan. The thirty-year fixed rate mortgage is not the only answer. Our Lenders can help you explore the various loan products that are available to you. Among some of your choices are adjustable rate mortgages, arms that are fixed for a certain term or can be converted to a fixed rate, and the more traditional fixed-rate mortgages.
8. Not Knowing what Homes Cost in the Area
The best way to know if you are getting a good deal is to research other comparable homes in the area. The internet is a valuable wealth of information. There are many sites that allow you to research home sales in a specific area. Just make sure that the homes you are comparing your home with are similar.
9. Using a Bad Real Estate Agent
Ask for referrals. Use a real estate agent that has your best interest at heart, not just selling a house. Interview several real estate agents, and ask to see their activity lists, which reveal every property the agent sold (or whose clients bought) in the past year. Look at sales prices. Make sure the agent has significant experience in the area where you want to live and the price range that you're looking for.
10. Forgetting About Closing Costs
You've been saving for a long time and you finally have enough money for a down payment on a new home. You contact a real estate agent who helps you find the perfect home that fits all of your needs. Now you realize that you have enough money for the down payment but fall short on the closing costs. Take into consideration when you are budgeting for your new home purchase that along with your down payment you will also have to pay for closing costs. Some of your closing costs will include lenders fees, title fees, escrows for property taxes and home owners insurance. In many cases you can negotiate for the seller to pay a portion of your closing costs. Many sellers are more than willing to contribute since it will help him sell the home. Many of our lenders' programs allows the seller to contribute up to 6% of the sales price toward your closing costs.
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