After months or even years of thinking about it you have finally decided to take the plunge and buy a home. Maybe it’s your first time buying or maybe you are moving up to a larger home. The goal is simple purchase a home that you love and at a price that you can afford. Sounds easy. Unfortunately, many home buyers make critical mistakes that prevent them from obtaining their goal.
Before you start looking for your forever home sit down and figure out how much of a house payment you can afford to make. It is critical that you create a realistic budget. Make a list of your monthly expenses. These may include vehicle costs, loan payments, credit card payments, groceries, insurance premiums, and vacations. Make sure you set aside money to cover unforeseen expenses that may occur. Now deduct these expenses from your monthly income. This will give you a rough idea of the money you have available to use as a house payment.
Now that you have a rough idea of your monthly house payment you can determine the price range of homes that you can afford. If you end up looking at homes outside your price range, you’ll end up lusting after something you can’t afford, which can put you in the dangerous position of trying to stretch beyond your means financially.
2. Skipping Mortgage Qualification
Before you start driving around looking at homes meet with a lender and get pre-qualified for a loan. By getting pre-qualified you will know exactly how much money you can borrow. If you don’t get pre-qualified you are wasting the seller’s time, the seller’s agent time and your agent’s time if you sign a contract on a home only to find out the lender will not loan you the money to purchase the home.
3. Maxing Out Your Spending Power
A common mistake made by home buyers is purchasing a home that will over-extend them financially. Even though the lender says you can afford a mortgage payment it could place more financial pressure on you than you expected. You can make the payment but there is nothing left over at the end of the month to cover unexpected expenses. Having a monthly house payment should not stress you out. Be smart and take on a monthly payment that you can comfortably afford.
I get it you want the perfect home. You have a wish list of features and amenities you want in a home and you will not be satisfied unless you find a home with everything on that list. No home is 100 percent perfect. If you don’t keep an open mind and are not willing to make a few compromises you will miss out on some great properties. The key is to clearly define those features and amenities that are “must- have” and which are “nice-to-have”. Great schools are a “must” while hardwood floors are “nice”.
5. Lacking Vision
Most buyers get turned off by cosmetic issues. They can’t get past the ugly wallpaper or the awful paint colors on the wall. Cosmetic problems may allow you to afford a house that you otherwise might not be able to afford. If the house meets your needs in terms of big things that are difficult to change, such as location and size, don’t let cosmetic issues turn you away. Remember wallpaper can be removed and walls can be repainted.
Have any other Common Home Buyer Mistakes that you would like to share ? Feel free to send them to me or leave a comment.