It’s both exciting and a little scary to buy a home. That feeling of nervousness and not knowing what to expect is normal!
But, what you don’t want to rely on during this process is luck or chance.
Everyone wants the “luck of the Irish” when looking for a home, but it comes down to much more than luck. It takes a strategy from start to finish if you want to find the right home for you, especially this year with home inventory at 40 year lows.
You can still wear green and keep that 4-leaf clover in your pocket as a buyer if that makes you feel better. But, as the saying goes, don’t press your luck and make sure you steer clear of these mistakes below:
Not knowing how much you can afford. Think monthly payments first and foremost, not just the purchase price. Next, get pre-approved by a lender BEFORE you start looking at homes. They may approve you for more than you are comfortable spending per month, so ask them to approve you for the monthly payments you want to spend, not the highest purchase price possible.
Make sure you understand the correlation between your purchase price, monthly payments and down payment required. This is different for every home buyer. Your friend at the office might be able to afford a much more expensive house by putting more down, for example, so make sure you know what your particular situation is and look for homes accordingly. You also should take into account not just the cost of the home but utilities, repairs and maintenance.
Not realizing that the wrong mortgage can cost thousands of dollars of needless interest. You might qualify for an FHA mortgage, but you have HUGE monthly mortgage insurance premiums that drive up your monthly payments. Plus, there are some great loan programs available right now that can save you hundreds of dollars a month.
For example, a 5% down loan where you don’t pay any private mortgage insurance. There are all sorts of loan options available these days and the “right” one is based on your particular financial situation and how long you plan to own your home. One loan definitely does not fit all, so do your homework and know the options and what is the right choice for you!
Not discovering hidden defects before you buy a home. Never buy a home without a professional home inspection. But even before you reach that point, YOU need to know what the potential problems are in the home. From the get-go, ask the seller questions such as: How old is the heating and air conditioning system? When was the roof last replaced?
Often there are warning signs such as water damage that the seller doesn’t necessarily need to disclose, but you can see when you are looking at the home more closely.
Not knowing how much your credit can affect your ability to buy a home. Lenders are tougher now and you need to have a decent credit score to get a low interest rate. About 3 – 6 months before you want to buy a home, start monitoring your credit online. You can go to websites such as www.myfico.com and pull your own credit for free. Do this very early on, before you start looking at homes, so you don’t have any surprises.
Most credit issues can be repaired but it can take a few months, so if you aren’t monitoring your credit on a regular basis, check it early on in the process.
Not knowing about all the great first-time buyer programs out there from state and local agencies. Don’t make this mistake! Many of these programs are only for first-time homebuyers and you don’t want to miss out of this opportunity. You can reap HUGE savings! There are down payment assistance grants and zero percent interest loans. There are even programs that exclude you from having to pay property taxes if your income qualifies! I work hand in hand with several experts and we can help you with these programs and determine if you qualify for them.
Not asking questions if you’re confused or need clarification. There are no stupid questions when you are making the biggest purchase of your life. Don’t hesitate to ask any questions! I’m here to help you along the way and can educate you on the process from start to finish.
You’re In Luck!
I hope you enjoyed my silly attempt at making buying a home tie into St. Paddy’s Day.
In all seriousness though, you’ve got to be one step ahead when it comes time to finding your home in this market. This article shows you how to do just that so you’ll be prepared and avoid some unnecessary mistakes.
And, if you are thinking of buying a home sometime this year, reach out to me and let me know. This year especially comes down to planning and prepping WELL before you want to make a move.
Together, we’ll make a plan that works for you and your timeline and then put into action when you say GO! This is just one of the ways we can make buying a home in this crazy market not just doable but actually enjoyable.
This is the best way to become a happy homeowner and have those Irish eyes smiling down on you along the way!