Whether you’re a first time homebuyer or you’ve shuffled through multiple homes and mortgages already there are a few mistakes that can come back to haunt you when you buy. Here’s a list of six common errors that you might want to avoid…
Mistake #1: Not knowing how much they can afford to pay for a house before they make an offer.
You can avoid this by getting pre-qualified for a mortgage from a lender, so you know in advance exactly how much you can afford.
Mistake #2: Not finding out in advance whom the real estate agent represents and not working with a REALTOR®.
You can avoid this by asking your REALTOR®. Most people think their agent is working for them. But unless the agent is working as your buyer representative, he/she represents the seller. And if you think you can save money by buying a home directly through the listing agent – you could be wrong. The listing agents responsibility is to the seller, not the buyer, and they’re going to work hard to make sure they get the best deal for the seller. Having a REALTOR® represent you as the buyer is free and they will help protect your best interests and get you the best deal.
Mistake #3: Not realizing that the wrong mortgage can cost thousands of dollars in unnecessary interest and taxes.
Not all loans are the same – and with different down payments, loan types and more, your loan could cost you a lot of unnecessary costs over the life of the loan. You can avoid this by consulting with a mortgage consultant, accountant, and/or financial planner before making a final decision on which mortgage to choose. CPAs can tell you the long-term effects on your income.
Mistake #4: Not discovering hidden defects before buying a home.
You can avoid this by hiring a professional to conduct a pre-purchase home inspection – we recommend getting a home inspection, AC inspection and a termite & bug inspection at minimum.
Mistake #5: Not knowing how debt can affect their ability to buy or refinance a home.
You can avoid this by asking your mortgage professional to help you review and repair your credit file in advance.
Mistake #6: Purchasing or financing big purchases before closing on their new home!
You can avoid this by waiting to buy furniture, appliances, a new car, a new motorcycle, etc. until after you close on your new home. And not just financing them – but also paying cash for them… if you make big purchases before you close you could lose your new home.
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