Common Home-Buying Mistakes That You Should Know Of

If you are still a newbie in buying a new home then you should be careful of the following mistakes: 1. Not budgeting for your first home loan - homeownership may seem like a wise alternative to renting, but it’s not necessarily…

If you are a still a newbie in buying a new home then you should be careful of the following mistakes:

  1. Not Budgeting for Your First Home Loan – Home ownership may seem like a wise alternative to renting, but it's not necessarily going to be cheaper -- at least in the short term. If you're like most people, and need to take out a loan to buy a house, you'll have to make monthly mortgage payments. It's a common mistake to assume what you can or can't afford. Before you make this decision, take a good, hard look at your income and expenses to find out the truth about what you can comfortably afford to pay every month for the next 15 or 30 years.The easiest way to do this is to make a budget. This entails listing all your income, including wage and investments, as well as all of your expenses, from monthly payments to food and even hair cuts. To figure out how much you can afford per month on something like a mortgage, it's a good idea to measure your budget in what you make and spend in the time span of a month. But just a month of income and expenses will only be a snapshot of your financial picture. Also, look at a few months of your financial activity to consider non-monthly expenses like vacations, wedding and birthday gifts. Source: How Stuff Works
  2. Skipping Mortgage Qualification – What you think you can afford and what the bank is willing to lend you may not match up, especially if you have poor credit or unstable income, so make sure to get pre-approved for a loan before placing an offer on a home. If you don't, you'll be wasting the seller's time, the seller's agent's time, and your agent's time if you sign a contract and then discover later that the bank won't lend you what you need, or that it's only willing to give you a mortgage that you find unacceptable.Be aware that even if you have been pre-approved for a mortgage, your loan can fall through at the last minute if you do something to alter your credit score, like finance a car purchase. If you cause the deal to fall through, you may have to forfeit the several thousand dollars that you put up when you went under contract. Source: Investopedia
  3. The “Fed Up” Purchase – You’ve been looking for a few months but haven’t found your dream home. The agents are misleading you; you may have been out bid by someone who had deeper pockets than you. You’re Fed Up!One big mistake home buyers make is to buy a property in desperation.They buy something reasonable rather than something that really suits their needs, because they’re sick of the emotional roller coaster of home buying.This is a decision you may live to regret for a long time.Rather than buying out of frustration, stop looking for a while, or better still get a buyers’ agent on your side to save you time, to look in nooks and crannies you wouldn’t have thought of and to find those silent sales for you – the off market properties. Source: Property Update
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