You’ve probably purchased a number of items you have ended regretting. But as compared to making a financial commitment on a home, that handbag or pair of jeans your partner warned you about doesn’t seem like such a waste. Moving into a new home is always an exciting moment in life. But, no matter how you think about it, owning a new home is a financial life-changer.
And unless you have a heap of cash ready to splash, there can be only two outcomes when purchasing a new home long-term joy and pride or a lifetime of regret. Today the average American mortgage debt hovers above $200,000, and you don’t want to add to this stat. So, do you feel the time is right to buy or move into a new home? Do not make the following buyer mistakes.
Hunting for Homes Before Seeking Pre-Approval
Unless money isn’t an issue for you, meeting up with a qualified loan officer is the only friendship you should be interested in right now. It will be challenging to know how much a financer is willing to loan you for your home purchase if you haven’t met with a qualified loan officer. A lender or financier usually focuses on some essential criteria when determining if you qualify for the financial assistance you need.
These criteria include how much income you make, how much you can afford as a down payment, your credit and employment history, current employment status, and the cost or value of the house you want to buy. Your lender will issue a pre-approval letter if you check all the good boxes and offer you a price range that will guide your home search. You can also use your pre-approval letter as an efficient bargaining tool when you’re ready to make an offer for a home that matches how much your lender is willing to offer you.
Purchasing Your Home Without the Help of an Experienced Professional
Another rookie mistake many first-time homebuyers make is trying to close a deal or purchase a home without the help of an experienced realtor or professional. However, after your pre-approval stage, the next best friendship you should be interested in is one with an experienced professional or realtor. Whether you’re searching for your home, bargaining, or looking into real estate closings, having an experienced hand to guide you every step of the way will help make the process as easy as possible.
For example, an experienced realtor is like having someone focused on looking out for your best interest, helping you avoid certain mistakes your inexperience and lack of expertise may cause you to make. Plus, a buyer’s agent has all the necessary tools and skills already custom-made to meet the needs of homebuyers.
Choosing the Wrong Mortgage
Apart from getting the right pre-approval before you dash off house-shopping, you also need to avoid choosing the wrong mortgage. And to do this, you need to put your best foot forward – with the help of an independent finance broker, that is. First of all, find out how much you can afford and take the time to do all your homework before going to the bank. And don’t simply rely only on the information available on the bank’s website. That is because there is a huge difference between what your bank has indicated that it can offer you and how much your bank will actually be willing to offer you. And you can only find out about the latter if you’re armed with an independent finance broker. It is important to ensure that you take your time to pick your financial package carefully. And this leads to the next mistake.
Choosing Your Lender Based Solely on a Low-Interest Rate
The fact that a lender offers you a low-interest rate does not automatically mean you’re receiving a great deal. Most of the time, these so-called low-interest rates are nothing but baits to attract various applicants from their current borrowers’ pool. The main reason behind this is to move applicants onto a different program with different rates, terms, and conditions. And such situations will barely save the applicant or borrower any money. Your best bet will be to work with a trusted and experienced loan officer who will meet and recommend the best lenders for you.
Finding a Property Yourself
You are probably readying yourself to spend hours online trying to find your perfect house. But no matter how top-level your research skills are, trying to do all the search by yourself is a bad idea – to put it lightly. Numerous online platforms may help make your search easy. But those aren’t enough, especially when it is close to impossible to visit every home to conduct your own close-up inspections.
Find a real estate expert who is an agent with the knowledge, skill, and experience to find all the right properties for you in the right locations. A trusted agent has the eye to spot the things you cannot see and knows if a property merits its proposed market value. Plus, you have a stronger negotiating power with an agent than alone, especially if you’re doing this for the first time.
Buying a Home That Fits Your Current Needs
A home is supposed to be a long-term (even a lifetime) investment. And the last thing you want to do is use your current needs alone to guide your decision-making. No matter what you look for in your ideal home at the moment, you need to think about where you see yourself in the future with respect to your home. For example, you may be single right now, but do you plan to get married and have kids? Will the current property you’re looking at be able to meet the needs of a growing family? Or will you need to move out after a couple of years? Do not let your fear of spending too much prevent you from getting a home you can live in for a lifetime.