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You’d be forgiven for thinking that buying a house is easy.
After all, 6 million homes are sold every year in the US! With so many people selling their homes, surely buying one is straightforward enough?
Unfortunately, it isn’t quite that black and white. Ask anybody who’s been through this process and they’ll tell you the same thing:
Buying a house can be a struggle from start to finish.
Everything from finding a reliable real estate agent to scouring the local housing market and arranging mortgages for houses can prove problematic.
However, it’s making key house-buying mistakes that can really complicate proceedings! Aspiring home-owners must steer clear of a host of possible errors when purchasing a new place. Don’t, and they can all too easily delay (or scupper) their efforts.
Want to learn about 6 of the most common errors to avoid? Keep reading!
1. Failing to Shop Around for Mortgages
Getting a mortgage is like buying insurance. Different lenders offer varying rates!
For instance, Ascend Mortgage Lender, Wells Fargo, and Bank of America might offer 3.5%, 4%, and 4.75% interest, respectively. An aspiring home-owner who went straight to Bank of America (without looking at other options) would pay a whopping 1.25% more than they needed to.
Now, that might not sound like much. Over the course of multiple decades, though, it could amount to tens of thousands of dollars.
As you can see, there’s a real benefit in shopping around for mortgages! Make sure you find the best possible interest rate before signing on any dotted lines. Don’t, and you could end up paying far more than you needed to.
2. Failing to Check Your Credit Report
The interest rate that a mortgage lender offers will be based on your credit report.
That’s why it’s so important to check your report before making your application(s). It gives you a chance to fact-check it first, identify any errors, and rectify them.
Imagine skipping this step.
The mortgage provider would base their decision off inaccurate information. Without anybody realizing, you could be allocated a higher interest rate than you really deserve. Heck, in some cases your application might even be refused!
Our advice? Leverage the free credit check that everybody’s entitled to each year. Correct any issues that could otherwise jeopardize your mortgage application.
3. Not Hiring a Realtor
Buying a house by yourself is 100% possible. People do it every year and save themselves a lot of money in fees as a result.
However, we don’t recommend it- especially if this is your first home.
Buying a property is a complex, involved process. You have to navigate around a minefield of possible issues- each of which can have costly implications. Having the guiding hand of an expert real estate agent can make an almighty difference.
They understand the marketplace, have contacts in the industry, and years of experience handling the legal and bureaucratic side of things. They can listen to your needs, organize appropriate viewings, and communicate with the sellers.
In other words, they make the whole process easier for you!
4. Bidding Too Much
You’ve found the perfect property.
It’s love at first sight, falls within budget, and sits in the ideal location. You’re determined to buy it and make the house your home.
But then, at the last minute, you’re told that someone else has made an offer. Even worse, they’re offering more money than you did! Before you can stop to think, you take it up a notch and offer an even higher amount…Only for the other would-be buyer to do the same.
A bidding war begins, driving the house-price up and up until it becomes unaffordable. You may get the property in the end, but your bank balance takes a hit at the same time. Needless to say, this particular fate is best-avoided.
5. Paying a Minimal Down Payment
Small down payments sound great.
After all, they help homeowners secure their property in record time. You can move in without having to scrimp, scrounge, and save every spare dime just to afford the deposit.
Unfortunately, lower down payments lead to larger monthly repayments. Putting 5% down instead of 20% is great for anybody who’s a fan of instant gratification. But you get saddled with sky-high repayments in the process.
That can put serious stress on your bank balance as the months and years go by.
Larger down payments do the exact opposite. Saving up tens of thousands of dollars is hard work. Do it, though, and you’ll benefit from more affordable monthly outgoings.
6. Not Considering the Future
As you know all too well, moving home isn’t cheap! Taxes, realtor fees, and the property itself amounts to a major investment. Move out too soon after moving in and you stand to lose considerable sums of money.
That’s why it’s crucial to find a property that you’ll be happy in for the foreseeable future. In an ideal world, you’d stay in the property for a minimum of 5 years. Only then can you expect to make anything (or break even) from the sale.
This is where planning ahead comes into play.
Think about the possibility of having kids (is there enough space in the house?), potential job losses (could you still afford to pay the mortgage?), the local area (will the property be easy to sell?), and so on. Projecting yourself into the future like this will give you a better chance of buying a suitable house for your needs.
Try to Avoid These House-Buying Mistakes
The reality of buying a property can be different from how it sounds. Far from being straightforward, it can be stressful, hard-work, and fraught with one issue or another. That’s why it’s so important to go about the task in the right way!
Avoiding the wide array of house-buying mistakes should help you find, buy, and move into your new place with far less trouble. Hopefully, this post will help in that regard. Would you like to read more articles like this one?
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