HOME-BUYING MISTAKES TO AVOID 5

The home-buying process is certainly an exciting time, especially for firsttime home buyers. But that is not to say the journey toward successfully buying a house can’t also be filled with risks and challenges. Your realtor will work with you to minimize potential home-buying risks. Here are five potential pitfalls to avoid when buying your next home.

1. Getting the cart before the horse.

The number-one mistake home buyers often make is beginning the home search before getting pre-qualified for a mortgage. Many firsttime buyers make the mistake of viewing homes before ever meeting with a mortgage lender. This automatically puts you at two profound disadvantages. First of all, you may waste time looking at homes you cannot afford. Secondly, if you do find the perfect home, you will not be able to make an offer without an accompanying pre-qualification letter, leaving you prone to getting scooped on the house by another buyer who has their pre-approval letter already in hand. Being prequalified sends the message that you’re a serious buyer whose credit and finances can successfully get a loan.

2. Only talking with one lender.

You are about to embark on quite possibly the single largest financial transaction of your life. Why would you not make sure you have the very best terms? Just like you will shop for the house that serves you best, you also need to shop for the lender that will also serve you best. Interview at least three different lenders. Also, don’t forget to include mortgage brokers as a source for funding needs. Compare rates, loan terms and lender fees. The best deal can possibly equate to thousands of dollars in your favor.

3. Buying more house than you can afford.

Don’t spend what you are approved for. Life has a way of throwing unexpected surprises our way, and the biggest surprises can often be the costliest. Maxing out your budget on a home loan does not allow for life’s surprises. Remember to include your potential mortgage payment as part of your overall budget of personal expenses.

4. Being careless with credit,

When you start your home search, you will begin with seeking a preapproval letter from your lender. Your lender will gauge the total amount you are approved for by pulling a credit report. Shortly before the closing date for the purchase of your new home, your lender will pull another credit report, to ensure your financial picture has not changed. One of the fastest ways to derail the closing of your new house at the last minute is by taking on any new debt, credit cards or major purchases, like car purchases.

5. Focusing more on house than neighborhood.

Finding the right house is important. But equally important is finding the right area. You can always trade up (or down) and you can always add on to the perfect house. But, ultimately, where the house is located should be given equal consideration.

When checking out a potential new neighborhood, try visiting the neighborhood during different times of the day to determine traffic flow. Do a test run from your place of employment to the proposed neighborhood, as well as test drive distance to places you frequent most, such as schools and shopping. Be sure to check out local crime statistics for the area, as well.