Buying a home you can’t afford: For some, this is am obvious mistake but it’s one that is often made. While it is perfectly acceptable to push the envelope a bit for that “perfect home,” taking on more mortgage than you cam afford will sabotage your monthly budget. A safe strategy is to keep your mortgage payment around 25% of your monthly income.
Forgetting about closing cost: There are a number of additional fees associated with purchasing a home, such as appraisal fee, home inspection fee, title insurance, and escrow fees. For the home buyer, these can add up to 3-4% of the home’s purchase price. Take these into account before making an offer to purchase.
Failure to get pre-approved: One of the most common mistakes buyers make is the begin the home purchase process before they begin the loan approval process. Don’t wait until you found your dream home to start shopping for the right mortgage. Buyers who are are already pre-approved to borrow money for their home purchase are far more attractive to sellers than buyers who are not.
Buying without a home inspection: In some real estate markets, the inclusion of an inspection contingency could mean the difference of a winning or losing am multiple offer bid. However, an inspection of the home’s structural integrity could save the buyer untold future expense. In the case where asking for the inspection to be a condition of the sale is prohibitive, perhaps consider performing a “pre-inspection”(with the seller’s permission, of course).
Taking out new debt before closing: Buying a house when you have a lot of debt is one of the worst mistakes you can make. Equally important is to avoid adding new debt prior to closing the home purchase process. Purchasing items on credit, like acquiring a new car loan, is the quickest way to crash your ability to qualify for a home loan.
Ignoring the neighborhood: There is an old saying in real estate, “Location, location, location.” We cannot overstate the importance of the home’s surrounding area. It is impossible to predict the future of your chosen neighborhood, but consider the home’s location and do your best to avoid unpleasant surprises that could affect your home’s value down the road.
Not Hiring a Professional: There are times to DIY, but purchasing a home should not be one of them. Professional real estate agents help guide buyers through the purchase process, from finding the right home and negotiating the terms of the agreement, right through to escrow. And the best part is, it’s the sellers who pay the real estate brokerage fee.
