Purchasing a new home is often considered an exciting time. It can be easy to make mistakes in the process without having enough experience, but these pitfalls can easily be avoided with a few simple tips and guidelines.
1. Exceeding Your Budget
One of the challenges that comes with shopping for a new home is viewing properties out of your budget. Although you may assume you’ll somehow make ends meet, it’s important to have a bit of cushion if your income fluctuates in the future. Strive to stay within your budget and take 20 percent off of your pre-approval number to ensure that you stay within your means.
2. Forgetting the Inspection
When a home is beautiful, spacious and everything you dreamed of it can be easy to get excited and not want to wait around for a home inspection. However, this could potentially save thousands of dollars in the long run if large problems are found by a trusted professional. Ask for a referral for a local inspector from a family or friend to ensure that any problems on the property can be factored into your offer or repaired before moving in.
3. Upgrading the Whole Home
It can be easy to want to upgrade everything you own once moving into a new home to create an overall attractive appearance. However, this is a common mistake many new homeowners make because it means extra unexpected costs that can deplete savings or add to credit card debt. Instead, be content with everything you have and gradually upgrade what you really need with time.
4. Forgetting to Budget for Extra Costs
Many people assume buying a home simply entails paying the 20 percent down payment to obtain the keys to the property. This leaves them surprised when it’s time to pay thousands of dollars in closing cost fees, higher utility costs, homeowner’s insurance, and HOA fees. Instead of making this mistake, get a homeowner’s insurance quote before purchasing the property and ask the owners for an estimate on the cost of utilities. This will make it easy to have more concrete details and really determine if you can afford the overall cost after crunching a few numbers.
5. Putting Down a Nominal Down Payment
For those who don’t have at least 20 percent of a down payment for a home that they want to purchase, it can seem like an ideal situation to only put three percent down when they qualify. Although this may mean that you move in sooner, it can hurt in the long run due to paying more in interest rates. Instead, save more in the next few years and wait patiently to ensure that you pay less and have lower monthly payments when it’s time to buy.
It’s crucial to have patience when shopping for a home to ensure that rash decisions are avoided at all costs. It will guarantee that you save more money in the long run and are still able to purchase an incredible home that you can truly afford. By following a few simple guidelines, the savings and payoffs will be well worth it.