For first-time home buyers, you should be knowledgeable that purchasing your own house isn’t a one day process nor inexpensive. You have to know and understand how long the process is before getting your keys to it. To help you with your journey, here are a few things you should remember to avoid the common mistakes first time home buyers are guilty of and have every penny well spent:
Not getting pre-approved for a home loan. Don’t go house shopping until you’re qualified for a mortgage. Applying for a home loan is a stressful process. In addition, why would you start looking for a home without even knowing how much you can afford.
You don’t want to be heartbroken when you finally found the perfect home but fail to show a proof of a pre-approved home loan to the seller. Before you go check in the market, get qualified for a mortgage first to know how much your budget is -- it could be lower or higher than you expected.
Relying on verbal agreements. Your seller offered you a 5% less in downpayment or a cat? Okay, sure. But remember to have it written down as validation that you in fact, agreed on it. To put it simply, don’t trust in verbal accordances. The seller or agent may promise you this and that but do they keep their word on it? Are they honest?
Worst case scenario for these instances would be when it comes down to finalization and you bring up whatever it you have agreed upon verbally, they may deny it and insist on it was never the agreement. When you encounter this, make sure to write it down and have them sign it for references.
Disregarding home inspection. If the seller is completely honest in disclosing the issues of the house, less work for you. Home inspection isn’t required but it is equally important as to when you’re just spotting a perfect place to live.
Skipping the inspection then eventually finding out you have electrical wire problems, plumbing issues and the likes, you’ll be financially responsible for it all. Unlike when conducting the inspection before closing the deal, you can still ask the seller to fix the issues.
Underestimating the overall costs. Don’t think that you will only be covering the mortgage, there are other fees to consider such as home inspection cost, loan organization fee, appraisals, property taxes, homeowners insurance fees and the likes.
To further educate yourself about this, consult your real estate agent and ask the necessary fees you’re responsible for to give you an idea of how much you should budget and save.
Overspending. When looking for a home, be practical and realistic. Do not spend beyond your means. Yes, the money you borrowed may be just enough to buy the house you’ve been visiting multiple times but have you thought about how will you cover for the property taxes, maintenance and repairs, renovations and other bills you will be covering?
Create a budget and list down the expenses you cover for monthly aside from the monthly mortgage payment -- list down your utility bills, luxury expenses such as; movies, restaurants and the likes, gas and other bills you will have to pay for every month. It’s safe to conduct a high estimate so you’ll know you have a breathing room.
Underspending. Spending too little is as bad as spending too much. How come? Well, have you checked the plumbing and have it repaired yet?
If you ignore these situations thinking you could save more if you let it be, it will only be more costly in the future if anything goes out of hand. Also, when buying a house, don’t allot a small budget if you’re planning on having a huge family that will only led you to outgrowing the house you’ve been eyeing on -- stretch your finances. Moving into another home might be your last resort when you have come to outgrown a house.
About Chie Suarez
Chie Suarez is a resident writer for RealPro, a licensed Real Estate and Business Agency. Chie usually finds herself accidentally stepping inside a home department store and open-house models.