If you are a first time home buyer about to take a plunge, we will highlight some common mistakes you should avoid. Avoiding these blunders could be the difference between spending thousands of dollars on repairs and enjoying financial security a few years down the line. So pay attention to the information given below because it could save you from a mountain of debt.
Failing to review your credit report
If you are planning on taking a mortgage, obtain your credit report from any of the major agencies before you even begin shopping for a house. Your credit rating will play a huge role in determining your interest rate. If there are mistakes in your report, you risk being denied a mortgage or getting one at a high interest rate. So ensure you get your credit report to ensure the lender is working with an accurate figure.
Buying a home for rent in a ‘weak rental market’
We’ve seen this time and time again- home buyers buy property, live for a short while and then move out expecting get someone to rent it. Make sure you are buying a home in a strong rental market if you don’t plan to stay there for a long time. If you move often, stick to renting a home and only buy when you are ready to settle.
Buying a home you simply cannot afford
Some home buyers assume that the mortgage payment is just a replacement of their rental payment. Buying a home comes with many other costs which need to be taken into account. Other than the mortgage payment, you will need to cater for maintenance, property taxes and insurance. When thinking about the kind of home you can afford, factor in all these costs.
Putting very little down payment
Some lenders allow first time home buyers to put up as low as 3% down payment in order to qualify for a mortgage. It may seem attractive but it can place you at a dangerous position as a buyer. When you start with such a low down payment it means you have very little equity in the home. In case you fail to make your mortgage payments because something has come up, you risk putting yourself in a serious financial situation. It’s best to buy a home when you know you have saved enough money to afford at least 20% as down payment.
Failing to ensure everything is in writingIt happens more often than you think- homeowners who agree to a purchase after promises are made orally. We’ve heard of buyers who wanted to withdraw the contract because the seller took all the appliances and they expected them to be left. It just doesn’t work like that. You have to ensure that everything that you’re told is in writing. How things like hot tubs, light fixtures, appliances and even drapes will be handled after the purchase should be listed on the contract. Don’t take their word for it, confirm on your own.
Posted By: Ochlockonee Bay Realty http://realestatecrawfordville.com/