If you’re new to the home-buying process, or it has been quite a while since you’ve done this, a lot of the procedures, paperwork and to-do lists can be intimidating and exhausting. Don’t add additional stress to your life by making these five major mistakes that home buyers consistently make.
- Not knowing how much you can afford to pay for a house before you make an offer. Talk about a huge hassle. Let’s say the seller accepts this offer, only for you to find out that you cannot get approved for the loan amount you’re asking. Now you just made the seller and realtor angry, not to mention you wasted everybody’s time. Most of the time, a seller won’t seriously consider an offer from a buyer who isn’t pre-approved for a loan – it’s like an empty offer. Avoid this mistake by going to a lender and getting pre-qualified for a mortgage so you know in advance exactly how much you can afford
- Not finding out in advance whom the real estate agent represents. Who are they working for again? Sometimes this can be a tricky answer. Most people assume that their agent is working for them, but unless the agent is working as your buyer representative, they represent the seller.
- Not realizing that the wrong mortgage can cost thousands of dollars in unnecessary interest and taxes. And why on earth would you want to spend a dollar more than you have to? Consult with a mortgage consultant, accountant and/or financial planner before making any final decisions on which mortgage to choose. CPAs can tell you the long-term effects on your income, and potentially keep more cash in your pocket.
- Not discovering hidden defects before buying a home. Home inspections are ESSENTIAL when purchasing a house. Is the price of the home substantially lower than the estimated value? Guess what – there’s something wrong with it, and it’s up to you to find it. Do not make the mistake of buying a house without getting a thorough inspection by a professional. The few hundred dollars will buy you peace of mind.
- Not knowing how debt can affect your ability to buy or refinance a home. Serious purchases such as a car, boat, jewelry, or anything you’d take a loan out for like schooling, should be avoided when buying or refinancing. These additional sources of debt only lower your chance to get approved for the loan amount you’re asking for. Asking your mortgage professional (me) to help you review and repair your credit file in advance will help you plan your goals accordingly.