Life contains certain landmark events: birth, getting your driver’s license, graduating from high school, getting married and so on. One of the most important decisions you will make in life is purchasing a home, whether it is your first home or the home you plan to live in until you die. It can be a very exciting process, but entering that process unprepared or getting caught up in it can spell trouble.
In order to help those of you looking to purchase a home this year, Alpine Bank has put together these eight common home buying mistakes in order for you to be better prepared and to make buying your home a highlight in your life.
Mistake #1, Forgetting About the Extra Costs- here’s a rundown of the costs you can expect to pay: mortgage (principal with interest), property taxes, homeowner’s insurance, utilities appraisal fee, credit report fee, escrow fee, closing costs and your real estate agent’s fee.
Mistake #2, Loving a House Too Much- getting caught up in all the features of a home can easily lead you over your budget. Stay practical with your needs.
Mistake #3, Buying More Home than You can Afford- a good rule of thumb here: if you are purchasing a home with another person, base the payment on only one of your incomes. That way, if something happens you will still be able to make payments on your home.
Mistake #4, Not Making a 20 Percent Down Payment- anything less than 20 percent likely means your lender will require costly private mortgage insurance.
Mistake #5, Not Having an Inspection Done- choose someone you trust and make sure it is done by the book. Nothing is worse than your foundation beginning to leak a year into living in your new home.
Mistake #6, Buying with Bad Credit- predatory lending is still alive, and is a sure way to end up in a home with a mortgage you can’t afford. Improve your credit score first before buying.
Mistake #7, Too Much Credit Activity- when you are in home buying mode, you should be doing two things only: paying bills and saving money. Anything else could mess with your credit.
Mistake #8, Not Being Committed to Staying Put- if you have a hard time with commitment, i.e., signing a one-year lease on your apartment makes you break out in hives, then homeownership is not for you. Make sure you are ready to live in the area for a while.
We hope recognizing these fatal mistakes helps you in your preparations for purchasing a new home, or at least gives you some guidance if the actual buying process is still a way down the road. Feel free to contact Alpine Bank’s mortgage lenders about these or other mortgage concerns.