Making mistakes, big or small, can be easier than you’d think when it comes to buying a property. Whether you’re a first-time homebuyer or you’ve done this dance once or twice, there’s a lengthy list of details, deadlines, and more to keep track of when you find the home of your dreams and go under contract on it. To help avoid common mistakes buyers make, and to ensure your home-buying experience runs as smoothly as possible, let’s talk about some mistakes buyers often make and how you can avoid them.
Not Getting an Early Start on the Approval Process
Finding a lender that you mesh with can be a little tricky. When you do an online search, there are hundreds and thousands of options available, but realistically it’s always in your best interest to work with somebody local. When you first start the house-hunting process, it’s important that you reach out to multiple local lenders to get a quote and get pre-approved for a loan.
Not only does getting a pre-approval letter help you stand out from the competition in areas like Carnesville, GA, but it can also help you navigate the market. A pre-approval letter will give you an idea of what you can afford and act as a preliminary approval for your home loan. This is great because it ensures you’re looking at homes within your budget, and it allows you to shop around with confidence while you hunt for that perfect property.
Buying More Than You Can Afford
While it may seem tempting to stretch your budget and buy a larger or more luxurious property, overextending yourself financially can lead to a variety of negative consequences when buying a home. Many times, buyers are approved for more than they can comfortably afford month to month.
Buying beyond your means can strain your monthly budget, leaving little room for unexpected expenses or saving for the future. It can also put you at risk of accruing excessive debt or falling into financial distress if your circumstances change, such as a job loss or an increase in interest rates. Additionally, buying more than you can afford may limit your ability to enjoy other aspects of life, as a significant portion of your income will be dedicated to mortgage payments and other related expenses. To avoid these pitfalls, it is crucial to carefully assess your financial situation, set a realistic budget, and prioritize long-term financial stability when making a home purchase decision.
Skipping Inspections
Inspections are an essential part of buying a home. Whether the property is 5 years old or 20+, you want to know all potential concerns before you sign those closing documents. Many first-time homebuyers opt to skip out on inspections in a competitive market as a means to stand out from other offers, which can ultimately be detrimental to their investment later on.
Having an inspection is a necessary part of the buying process. Not only does it protect you as a buyer, but it helps alert the sellers of any damages or concerns they may not be aware of. It’s also a great way to start negotiations and get a better deal on your buy in case there is something that needs to be fixed.
Making Last-Minute Major Purchases
When buying a home, making any big purchases can pose significant issues leading up to the closing table, and your lender will likely warn you not to make any drastic financial changes until after closing. It’s crucial to maintain financial stability throughout the home-buying process, as sudden significant expenses can disrupt your financial situation and your ability to secure a mortgage. These last-minute purchases can increase your debt-to-income ratio, which can make it more difficult to qualify for a loan and may even cause your loan approval to be revoked.
Additionally, major purchases can consume a significant amount of your savings, leaving you without an adequate emergency fund or funds for necessary home repairs or unexpected expenses that may arise after moving in. Before you make any big buys while under contract, consider the impact of that major purchase and consult with your trusted financial advisor or mortgage lender. Impulsive shopping decisions are a frequent cause of loans falling through and may leave you with a denied loan, which means you may not be able to buy and move into the home of your dreams.
Still worried you’re going to miss something or make a mistake when buying your dream home? Let’s chat and talk about all the things you need to do to stay on top of things until you get those house keys in your hands at closing.