Buying a home is a huge investment, so you don't want to complicate the process with errors. There are many things that can make your first home buying experience feel overwhelming, but learning how to overcome the obstacles will alleviate some stress and headaches. Here are the top five mistakes new home buyers make, and how you can avoid them.
Not Becoming Pre-Qualified
Getting pre-qualified for a mortgage allows you to understand the home prices you can afford. You won't be searching above your means. It also proves that you're a serious buyer. When you're pre-qualified, you may place a bid immediately after you find the perfect home. Also, it gives a real estate agent a negotiating edge over other bidders.
Not Understanding the Total Cost of Buying a House
Besides the face value, there are numerous costs associated with buying a home. One of the most expensive is closing costs. Normally, you'll need up to 2.5 percent of the purchase price. This goes toward land transfer tax, property tax, property insurance, and moving costs. Also, there'll be costs associated with the home itself. Furniture, landscaping, and other renovations will require even more money.
Not Requesting a Home Inspection
It's extremely important for you to make an offer conditional on a professional home inspection. You certainly don't want to purchase a home that's filled with defects. If the results identify problems, you'll be able to negotiate a lower price to offset repair costs.
Not Choosing the Best Payment Schedule
Depending on how much you can afford, it's best to create a custom mortgage payment schedule. Paying a mortgage off quickly will save on interest. You can save a great deal of money by selecting a shorter amortization time frame. Even increasing the amount placed on a monthly payment will make a big difference in the end. However, longer amortization lowers the payments each month. This allows you more cash flow for fun things.
The standard home mortgage has a 25-year amortization period. To qualify for a longer time period, it will be necessary to make a larger down payment. The maximum time allowed is 30 years.
Not Using a Qualified Real Estate Agent
When you're buying your first home, it's essential to consult with a professional real estate agent. These experts will work for you and make sure you're paying a fair price. Also, they offer advice and will be able to find homes that fill your individual wants and needs. When entering into a contract, real estate agents known what terms are necessary to include. Since they have your interests at heart, they'll be able to negotiate the best deal. They're the most important tool when it comes to first-time home buying.
After reviewing the common errors of new home buyers, it'll be simple to get through the process without problems. You'll be able to enjoy your dream investment and pay the mortgage without financial stress.
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Posted by Terry Paranych on
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