5 mistakes homebuyers need to avoid
You have decided to take the plunge into homeownership and buy your first home. You have even began the search process. For the first-time homebuyer, buying a home is both exciting and overwhelming. But there are some mistakes that homebuyers need to avoid so as not to overlook important facts about homeownership and signing a contract before you are really ready.
Five mistakes first time homebuyers need to avoid:
1. Searching for the dream home before getting prequalified for a loan. Take the time to talk to a lender about how much house you can realistically afford and what the monthly payment breakdown with all taxes and fees included will be. By getting prequalified for your loan, you save yourself the disappointment of not being able to afford the home and save time looking at an unrealistic price range.
2. Holding off in hopes of a better rate. Most rates are rock bottom and are only going to continue raising. If you are concerned where rates are going though look at securing a loan at an adjustable rate instead of a fixed rate, just take care that if the rate raises it will not push you out of your affordable budget.
3. Not thinking of the Future. It's easy to get carried away with that new home search and overlook some important information about the neighborhood you would move to, future developments in the area, and the resale value of your home. Looking for your new home, the idea of selling this new home probably isnt at the top of the priority list, but it should be. Buy your first house with the idea that you can resell it with some ease should your plans change in five years.
4. Making an emotional decision. You need to separate your emotions from the decision before signing the contract. Make sure youre investing in a home that will offer you a good return on your investment and ideally has a good resale value. Create a pro and con list of each property and use an objective approach for your homebuying decision. Turning a blind eye to creaky floorboards because your enamored with the style of the house can lead to troubles in the future. You want to invest in a home that you can be happy with for years to come.
5. Overlooking hidden costs. Consider the cost of home maintenance, utilities, homeowners dues, and property taxes in addition to monthly mortgage payments. Also, dont overlook moving costs or extra furniture you might have to purchase to furnish a larger living space. Consider getting quotes from specialists to price out potential updates and improvement projects. While the selling price can give you a fair idea of what you will be investing for your home, you also need to look at all of the extra costs required to maintain your home.
Having a trusted Agent to guide you through this process is benefical to put your mind at ease and to look out for your budget and investment.
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