Buying a home is a fun period in anyone’s life. You’ve waited and saved money for a while now, and you can’t wait to decide on a house.
But before you get the process moving along, you might be wondering what mistakes to avoid. After all, not everyone knows what hiccups they might encounter along the way.
You may think you’ve saved up enough money, but in fact, you need a lot more for a down payment. Or, you end up rushing through the process and miss out on pertinent details.
To prevent these errors from happening, we’ve come up with a list of five things you should avoid.
Prevent yourself from making these mistakes, and your homebuyer experience should go well!
1. Not Saving Up Enough Money First
If you haven’t saved up enough money for a downpayment, it’s not smart to buy a house quite yet.
Now, if you’ve recently retired and have saved enough money for a while, you’re in good shape. You have enough money for a downpayment and later, staying on top of paying off your mortgage.
But if you recently got demoted at work or haven’t saved a lot of money, you may want to wait a while yet. Or, look for more affordable options such as a manufactured home.
Getting in over your head can lead to a lot of stress and bankruptcy in the worst-case scenario.
2. Buying a House That Goes Beyond Your Budget
It’s easy to get wrapped up in thinking you can afford a beautiful home that surpasses your budget. But if you buy a house that’s expensive and can’t afford it, it could negatively affect you.
Sure, you’ll have a lovely home, but what if you fall on tough financial times?
Figure out what type of house you can afford and factor in your monthly budget, as we discussed. That will give you some guidance on how to proceed and what kind of place you can get.
3. Not Paying Attention to Your Credit Reports
Have you checked out your credit reports as of late? Mortgage lenders will look over your credit report with a fine-toothed comb. And if it has any mistakes on it, it may affect your chances of getting a loan.
Yes, it turns out that sometimes credit reports do have errors. So it’s in your best interest to check it out and make sure everything is accurate!
Run your credit before a lender does so you’ll know what they’ll be seeing. That way, if you encounter any errors, you can get them corrected ahead of time.
4. Going Full Speed Ahead
Even if you’re in a rush to buy a home, it’s not wise to get ahead of yourself. When purchasing a house, you should take your time.
It would help if you mapped out a plan far in advance, so you’ll know what steps to take. If you haven’t made a plan and are ready to buy a home, it’s not too late to create a list.
This list should include things like what you are looking for in a home. Or, it could outline how long it’s going to take you to set aside a certain amount of money.
Look over your list and figure out if your goals are realistic. You may find that you need to boost your credit score or put more money aside before buying a house.
5. Forgetting About Other Home Ownership Costs
It’s exciting when you receive the keys to your place. But don’t forget about property taxes and home insurance! And, of course, there are utilities to pay.
Don’t overlook all the hidden expenses that come with buying a house. Make sure you’ve put aside enough money to not only pay your mortgage but pay all your bills.
Sometimes property taxes increase after the closing, so keep this in mind. Have some cushioning in place. That way, in case your property taxes or other expenses slightly increase, you’ll be fine.
Looking for and deciding on a home is an exciting process, but it’s vital to be prepared. Don’t overlook hidden costs or get too far ahead of yourself.
It’s essential to make sure you have enough saved up and that your credit score is excellent.
There’s always going to be room for improvement. All in all, though, you should feel confident when it comes to buying a house.
That way, when it’s time to bite the bullet, you’ll be ready to move in and enjoy being a new homeowner!