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5 Mistakes to Avoid When Buying a Home

5 Mistakes to Avoid When Buying a Home

Jul 20, 2018 HL Staff
First Time Home Buyers

Buying a home is not an easy task, and it is very easy to make a mistake or miss a step. For first time home buyers, it is very easy to make mistakes when buying a home. Doing just a little bit of research before buying a home can help to avoid many of the pitfalls and blunders that befall many people when they set out to be homeowners. Know what mistakes to avoid when buying a home can mean the difference between prosperity and possible ruin.

Neglecting credit score

A lot of potential homeowners make the mistake of looking at homes to buy before they've ever checked their credit scores. It is a very common mistake people make because they are eager to find that perfect home and pull the trigger. Checking one's credit report and ensuring its accuracy is a crucial step in the home buying process. It could mean the difference in tens of thousands of dollars in interest over the life of a mortgage.

Failing to get preapproval for a loan

After reviewing one's credit report, a smart move is to reach out to a lender and get preapproved for a loan. Getting pre-approval can help determine how much house one can afford to buy. Having a pre-approval in hand helps limit the home search to only those home which can fall into the appropriate price range and can save home searchers valuable time during their quest to find a home to purchase.

Not considering the associated costs

A surprising number of people buying homes are completely blindsided by the associated costs that go along with a new mortgage. Taxes, closing costs, insurance, HOA fees, and sometimes PMI. Always consider these associated costs when budgeting for a mortgage.

Not budgeting

Setting up a long-term budget is another very important step in the home buying process. To avoid this mistake, those looking to buy a home have to budget appropriately to determine how much they can afford for a home. Nobody wants to be "house poor" where the majority of their income goes to the cost of owning a home. A good rule to follow here is to expect no more than one-third of monthly income to go to the associated costs when buying a home. Additionally, new home buyers should budget for any additional costs caused by unforeseen expenses or emergency repairs.

Not using an experienced agent

It is entirely possible for someone to go out there and buy a home all on their own, but trust us, using an experienced agent to handle the home buying process and negotiating the sale is a very smart move. There are plenty of ways to ruin the deal on buying a home, and there is no reason to not include the expert advice of a real estate agent with good experience. Additionally, ensure the real estate agent of choice is open to being patient with first-time buyers. A good real estate agent will try to be as accommodating as possible and be more than willing to answer a multitude of questions regarding the home buying process.

Most people are not aware there are other ways to buy a home that does not require an immediate commitment. Rent-to-Own homes are a great alternative to those who are not quite ready to sign on the dotted line for a mortgage today.

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