Gearing up to purchase your very first house and lot? Know that shopping around for a house is both exciting and pretty scary at the same time. Unfortunately, plenty of buyers make these common mistakes that could prevent them from securing their dream home.
Not Estimating What You Could Afford
If you haven’t set a budget yet, list down all your monthly expenses — apart from rent, which include credit card payments, health insurance, car costs, student loan payments, groceries, retirement savings and the like. You should also include huge expenses that you spend on yearly, such as vacations and insurance premiums that you pay off every year, advises a mortgage loan specialist at Primary Residential Mortgage, Inc. You subtract the total from your income so that you could estimate the amount you could comfortably spend for your new home every month.
This is crucial since if you look at properties that are not within your budget, you will just be frustrated because you know you can’t afford them, or worse, try to stretch whatever savings you have just to try to buy something that you can’t really afford.
Not Bothering with Home Inspection
While it’s easier to think that you’re immediately a homeowner once you’re in escrow, know that prior to closing, you must know the condition the house is in so that you don’t purchase a home that requires surprise and costly repairs. So keep your expectations and excitement in check until you get a full and thorough inspection.
Not Getting Preapproved for a Mortgage
If you don’t get preapproval from a lender prior to placing your offer on the home you’re after, not only will you be wasting your time, but the time of the seller, his or her agent, and your agent as well if you sign on the dotted line and find out later on that the lender won’t loan you the money you need, or that it could only offer a type of loan that won’t be enough for what you want to buy.
While hunting for a home that you could afford could seem stressful, if you are fully aware of the potential issues such as those mentioned above, you could better protect yourself from making these mistakes.