Caught up in the excitement of buying your first home it is very possible that you will make some mistakes in this very large financial transaction. Here are some mistakes to avoid when buying a home.
- Failure to Research The Neighborhood: Learn some important facts about a neighborhood before you decide to buy a home there. For instance, how do property taxes in the neighborhood compare to other nearby neighborhoods? Property taxes vary and there can be a huge difference. These property taxes will most likely be escrowed and made apart of your monthly mortgage payment. The lower the property taxes the lower your mortgage payment will be. It is a good idea to also check on how good the public schools are that your children will be zoned to go to. If you buy in a neighborhood with terrible schools then your children’s education will suffer or you will be stuck paying for private schooling. Also, check on the crime statistics in the neighborhood before deciding to buy there. You do not want to buy in a neighborhood that your family cannot feel safe in. High crime, bad schools, all bring down the value of the homes in the neighborhood.
- Failing to Get Several Mortgage Quotes: The financing of your home purchase involves at least hundreds of thousands of dollars in interest payments. Securing the lowest possible interest rate can save you a ton of money in interest payments. A very small difference in interest rate can save you thousands and thousands of dollars. So be smart and get several quotes before you decide whom to get your mortgage loan from. Once you make the decision ask your lender to lock your rate in for you to secure it.
- Lack of Comparison Shopping: Again, being caught up in the excitement of becoming a homeowner you could very easily fall in love with the first property for sale that you see. However, the best thing you can do is hold back your decision to buy a home until you have thoroughly looked at other homes for sale in the area. Speaking from experience in doing so you may find another home for sale that is much nicer or more suitable for your family that is still in your price range. So look swiftly, take notes on each home you visit and then decide which home you want to make an offer on.
- Failing to Get a Home Inspection: A home inspection is critical in the home buying process. You do not want to buy a home as is unless you are financially prepared to pay for and fix any issues that are uncovered during the appraisal of the home. Getting a home inspection and having an inspection addendum in your purchase contract legally allows you to pay for an inspection to uncover any mechanical or structural issues with the home. Any issues the inspector finds can then be negotiated with the seller to repair these before your move in date. If the seller will not do so then you can back out of the purchase of that home.
- Taking on an Excessive Mortgage Commitment: Do not get caught up in the moment and buy a home that carries with it a mortgage payment that would really be a tight challenge to pay each month. Buy within your comfortable means. Many people fall in love with a house and in that moment are not thinking seriously enough about the financial aspect of having to struggle to make that mortgage payment each month.