In the market for a new home? Purchasing a home is definitely something we don’t do every day. So it’s easy to make mistakes, and when it comes to home buying, mistakes can be costly. Here are some of the most common errors made by first-time buyers, as well as those who already have purchased a home or two before.
Shopping before getting pre-approved. Pre-approval is essentially a commitment from a mortgage company to provide you with a home loan up to a certain level based on your financial circumstances. Without consulting with a mortgage company first, you aren’t going to know how much house you can afford. And if you find a home you want to buy, most sellers today may disregard offers from buyers who aren’t pre-approved by a mortgage company. Get pre-approved before you start looking at homes.
Looking for homes on your own. Don’t go it alone. You’ll want the experience and knowledge of a real estate agent on your side. An agent can provide another perspective on the home you are thinking about buying and help you avoid common home-buying mistakes.
Using up all your cash on a down payment. Many buyers want to put as much as possible down on their home purchase to lower their monthly payment and/or to reduce or eliminate mortgage insurance premiums. Just make sure you have enough cash remaining for unexpected expenses after you’ve bought your home.
Skipping the home inspection. Never (ever) skip a home inspection when buying a home, if at all possible. A quality home inspection can reveal critical information about a home’s condition you’ll want to know before you sign on the dotted line.
Buying things. Hold off on purchases of items such as furniture before you complete your home purchase. Your home loan pre-approval is dependent on your current financial situation. This isn’t the time to be adding more financial obligations or draining your savings account.