There are mistakes which many home buyers make when purchasing a house, but they can be very easily avoided with a little of research and planning. If you arm yourself with these tips to get the most out of your purchase and avoid making costly mistakes that you won’t have to be stuck with the consequences.
Refusing to Confide in Trusted Advisors
Advisors could be your realtor, real estate lawyer, real estate agent. Home buyers withhold information from advisors can be a costly mistake. Buyers do it for fear of how they will be perceived, have a belief they have all the answers, and/or don’t feel it is important enough. Your advisors are representing your best interests and have a fiduciary responsibility to do so.
Find a good buyer’s agent. Buyers should rely heavily on knowledgeable agents to help them in home buying process and can provide valuable resources. Buyer’s agents have a fiduciary responsibility to the buyer exclusively and should be looking out for their best interests. It might not work in your best interest if you are dealing with a seller’s agent without your own.
Not Knowing How Much House You Can Afford
Many first time home buyers spend a lot of time researching homes, but very little time spend on their finances. What you think you can afford and what the bank is willing to lend you may not match up, so make sure to get preapproved for a mortgage loan before house shopping.
You want to talk to a qualified lender and get preapproved for a mortgage. Figuring out how much house you can afford is the first step that prepares you for buying a home.
Never underestimate the costs involved in buying real estate property. Remember to budget for home inspection fees, appraisal fees, loan application fees, credit reports, title insurance, and other costs.
Underestimating the Costs of Owning a Home
When you finance a home purchase with a mortgage loan, the costs of owning a home is more than the monthly mortgage payment. Do not forgetting to include property taxes, maintenance costs, and home insurance into your calculation of housing costs.
When considering how much your budget is for your new home, you must consider your borrowing capacity — your ability to make regular payments on your possible home loan.
Maintenance Costs. Many home buyers don’t anticipate the additional costs for repair and maintenance, or for an increase in utility costs. Consider the age of your new home. Be prepared to set aside a small budget annually for repairs and upkeep.
Property Taxes. You should know how property taxes will have to pay and factored it into your home buying budget. Call the local county tax assessor’s office or ask your agent or the seller.
Home Insurance. Homeowner’s insurance is a requirement by your lender since they want to protect their collateral from perils. Get recommends from your agent and shop around for the best deal. Don’t pay too much for over coverage.
No Home Purchase Contract Contingencies
Finally, you want to include a contingency clause in the contract. A mortgage financing contingency clause protects you. A contingency would let buyers back out of a purchase contract. That is, to cancel a contract without penalty, meaning buyers would get back the money deposit used to secure the property. Without the clause, a buyer can lose that money and still be obligated to buy the house.
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