Finding a home that you love at a reasonable price can be exciting, daunting, and a little bit frightening. If you are shopping for a home for the first time, you will soon realize how stressful it can be, and how many factors you need to consider. Unfortunately, many first-time homebuyers make costly mistakes. To avoid making the same mistakes, you have to stay informed about these common homebuyer mistakes.We get more info on sell house.
Failure to Determine What You Can Afford
You have to understand that you cannot simply decide what you can afford according to the amount you are comfortable with paying, since the bank may have a different opinion. If you haven’t set your budget yet, make a list of all your monthly expenses but exclude rent; this includes your recurring monthly payments and major expenses that occur only once a year. Get the total amount of your expense and subtract it from your take-home pay. By doing so, you will know the amount you can pay for your home every month. If you fail to do this, you will end up looking for homes that are outside your budget and eventually fall in love with a house that is out of your price range.
Shopping For A Home First And Applying For A Loan Later
As a first-time homebuyer, you have to understand that buying a house doesn’t start with home shopping. It must start with getting prequalified for a loan- unless you have enough money to pay cash for your home. The bank may not be willing to lend you the amount of money you think you can afford, especially if you have a poor credit rating, or you have an unstable income. For this reason, you must get pre-approved for a loan first, before you start shopping for a home. If you fail to do this, you will only waste your time. Remember the basic rule of house hunting: Get pre-approved first, and then find a home.
Didn’t Consider Additional Expenses Aside From Mortgage Payments
A lot of first-time homebuyers decide to purchase a property when they feel that they can afford a mortgage. However, there are other expenses which you and other homebuyers need to consider. For instance, you will have to pay for home insurance, property taxes, house maintenance and repairs, homeowners association payments, and so on. Just because you can afford a mortgage doesn’t mean you are ready to own a home. Do not forget to consider these additional expenses since the bills might pile up if you fail to pay for them.
Spending All Your Savings on Down Payment
There are a lot of first-time homebuyers who spend all or most of their savings on down payment. This is a critical mistake that homebuyers make since they are left with no savings at all. If you have been shopping for a property, you know by now that if you pay 20% down, you won’t have to pay for mortgage insurance. This is usually a good idea since it can help you save on monthly mortgage payment. However, it is not worth the risk of living without any savings.