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Home Buyer Mistakes

By
Real Estate Agent with Keller Williams Realty

A home buyer will probably experience some uncertainty when they decide to purchase their home.  This experience can be exciting, confusing, and complex all at the same time.  What they do not want to do is to make serious mistakes during this process.  Following are some suggestions that may prevent a first-time home buyer from making serious mistakes:

·      Can you afford to purchase a house? – Determine how much you can afford to borrow and whether you qualify to borrow that amount.  When determining this amount, understand the life style you wish to live and be honest with yourself.  This will make a difference in the size of your mortgage loan.  Make sure you take into account homeowners insurance, property taxes, and maintenance costs.  All of these costs need to be factor into your budget.

·      Don’t overlook other costs – There are other costs besides your mortgage when purchasing a home.  Be sure to get an estimate of pre-paid and closing cost from your realtor prior to signing a contract.  In addition, a buyer will incur moving costs moving into their new home, and possible repair cost before and/or after after moving.  Most of these costs will be out-of-pocket while some may be able to be rolled into your loan.

·    Pre-approved for mortgage loan – Recommend getting a Pre-Approval Letter versus a Pre-Qualify Letter.  The Pre-Approval Letter carries more weight to the seller, and probably allows the buyer to close quicker which may benefit the seller.  This letter defines the price range which a buyer can purchase a home.  Finally, in connection with this letter, request a Good Faith Estimate from the lender.  Good Faith Estimate defines, amount of loan, interest rate, closing cost, pre-paid costs, and monthly mortgage payment.

·     Don’t let emotions control your actions – Be sure you select the right neighborhood, home is not to large, area within the house fits your needs, determine an accurate estimate of dollars you need to spend in renovations prior to moving into house, and as a buyer do not communicate with the seller, that is real estate agent’s job.     

·    Don’t be over critical – Do not go to the extreme by nit-picking everything.  This may lead to no decision towards a goal of having your own home.  Remember to look at the basic bones of the house, and if they are acceptable, then everything else can be changed to your personal taste.

·       Always get a home inspection – Normally, a buyer’s contract allows a period to get a home inspection. Very important that a buyer have an inspection to prevent incurring expenses that could have been prevented.  A full inspection will cost the buyer approximately $400 to $600 depending on the size of house, and what extras are being inspected.  This is money well spent.

 

·      Make sure you have sufficient funds to make down payment – Ideally, it is great to be able to have a 20% down payment.  This will prevent paying mortgage insurance.  In most all other situations, the buyer will be required to have 3.5 to 5% down payment depending on type of loan plus closing costs.  Prior to starting your home search, discuss your financial situation with a mortgage lender to determine your available options.             

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