7 Mistakes Many New Home Buyers Make
Once the ether wears off, and the dust from moving clears, new home buyers oftentimes reflect on their decisions for buying a new home. Since this will be a significant, if not the biggest purchase of your life, it behooves to understand these tips for homebuyers and all of the parameters involved in purchasing a new home.
In this article, we uncover seven mistakes commonly made by new homebuyers that you can reference prior to signing on that dotted line:
In many cases when people are considering their budget prior to buying their first home, they sometimes overlook ALL expenses. It may be helpful to write down what you’re currently spending down to the penny.
Once you have a clear understanding of what is going out for things like food, entertainment, clothing, gas for your car, etc., you can obtain a higher knowledge of day-to-day living. You can then calculate how much of a mortgage is obtainable.
RELATED: How Much Home Can I Afford?
Simple daily costs are not going to go away, so it makes perfect sense to budget correctly. Many times people become unrealistic in their expectations, making it difficult.
Your mortgage is going to be your highest expenditure, but you still need to live. By creating reasonable perimeters, you’ll be a lot happier as a new home owner.
It may be helpful to write down what you’re currently spending down to the penny. Once you have a clear understanding of what is going out for things like food, entertainment, clothing, gas for your car, etc., you can obtain a higher knowledge of day-to-day living. You can then calculate how much of a mortgage is obtainable.
Simple daily costs are not going to go away, so it makes perfect sense to budget correctly. Many times people become unrealistic in their expectations, making it difficult. Your mortgage is going to be your highest expenditure, but you still need to live. By creating reasonable perimeters, you’ll be a lot happier as a new home owner.
Getting prequalified is imperative to avoid making a mistake. In most situations a realtor will redirect people looking to purchase a home prior to them working with you.
By allowing the bank to give you a realistic number to shop with, you avoid wasting valuable time. More importantly, you’ll be looking at property that is suitable for you.
RELATED: Will I Qualify For A Mortgage?
Hire a Professional
Hiring a professional is easy, hiring one that’s better may be difficult. Be sure to ask for referrals when it comes to loan officers, realtors and real estate attorneys. A professional real estate agent can be invaluable when it comes to purchasing your first home.
Don’t try to manage this type of transaction alone. It’s crucial to understand what you’re purchasing, what’s involved in the contracts and what will happen after you sign. By working with an experienced loan officer or attorney, you should be privy to any laws and ensuring your first home doesn’t have loopholes.
Think into the Future
Once you’ve become pre-qualified and start shopping think into the future. Mortgages and interest rates can change over time. It’s highly advisable to understand your loan and what changes are possible over the next 2 to 30 years. While many things are unpredictable, it’s best to prepare yourself and create a safety net if possible.
Don’t Be Overly Anxious or Picky, Do Get an Inspection
An inspection will most likely be required, while your home is in escrow. In the meantime, don’t be overly anxious to avoid jumping into the first thing you see. The other issue with being overly anxious is to change gears when you’re negotiating. Take your time but don’t be overly picky either.
Don’t Spend Entire Down Payment
Being overly picky means that you may end up with a home that needs to be fixed the way you like it. Since it’s the first home, chances are it will be one of many. If it isn’t 100% the way you pictured it, keep in mind that it’s your first home and your next will come closer.
Don’t Make Additional Purchases
Don’t spend your entire down payment on the ‘down payment’. That being said, remember there will be extra expenses that will pop up and you’ll need at least petty cash laying around to cover them.
This last part is HUGE! While you’re in escrow, your loan officer or your realtor may advise not to go out and get a line of credit for ANYTHING! This is really important because the last thing you want is the bank to turn you down for suspicious activity. Don’t run out and charge a line of credit to buy new furniture or get a new car. It’s super smart to lay low while the banks do their thing.
By following these simple tips you’ll be a lot happier and the chance for buyer remorse won’t kick in. Keep all your receipts and documents in one safe place for easy to reference materials, in case you need it. It’s the little things that will help in the long run to lessen your chances of making a valuable mistake later on that count.
For more information on buying a home, contact our Jersey Shore real estate experts for answers.
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