Worst Mistakes First-Time Homebuyers Make
If you are a first-time homebuyer, you become overwhelmed by the excitement and fear. Searching for a home is also tedious. Your main target is to get a home that is affordable to you and one that will like. However, people make mistakes in a process that put them off them from reaching their targets.
Below are guidelines that will lead you into achieving most of your goals while purchasing a house and how to avoid the following 10 mistakes that could stop you from the purchase.
- Not Knowing What You Can Afford
From the subprime mortgage mess, we have learnt that the bank may say you can afford but deep down within you know what you can afford, therefore, they are two different things. Always make a list of all your monthly expenditure with an exclusion of rent if you have not drawn a budget. Expenditure includes, student loan payments, credit cards payments, vehicle cots, groceries, health insurance, and retirement savings among others.
You should also not forget the large annual expenses like insurance premiums that you have to pay on a yearly basis. There are also annual vacations. Deduct all these expense from your net salary. From there, see if the remaining amount is enough to pay your new home on a monthly basis. Remember to make use of a mortgage calculator in order to check on the interest rates and the results you will expect are the estimate of your total mortgage payment.
- Skipping Mortgage Qualification
Ensure that you get a loan approval by loan lenders or a highly ranked bank before making an offer of the new home. Sometimes what you think you can afford and the amount that the bank is willing to give you may differ. This could be caused by poor credit score or insufficient income that is unreliable. If you go ahead and sign the contract before getting a loan approval, you will waste everyone’s time, the agent’s and the seller is including your own time when the bank fails to approve. Even if you get the approval , they may fail to loan you if there is alteration in your credit score, like when you purchase a car. If you are the reason for the failure of the deal, you will be forced to part with the amount of money you deposited as you signed into the contract.
- Failing to Consider Additional Expenses
Once you have acquired your home, there are additional expenses you may incur. They include, property taxes, disaster insurance, repairs and additional hose needs that may turn out to be expensive such as a new roof or a new furnace.
For a condominium, there shall be monthly maintenance fee in spite of whether anything requires fixing. Living in a condominium means that you are among homeowners association that collects some hundred dollars per month from the owners of each unit as condominium fee. You will be subjected to similar fee if you buy cooperative apartment.
- Being Too Picky
You should have a decided mind. Write down what Real Estate Search features you want your new home to have. Be flexible so that you do not become too meticulous and fail to move out of your renting place. If you are a first- time homebuyer, you have to forego the things you want when you have limited budget plan. You have to learn to embrace new things like living in a busy street. Having an extra bedroom and accepting outdated décor.
Nevertheless, you can decide to continue renting until you can afford the things you want, although it is advisable to own a home than waiting for the perfect year.