Buying your home is one of the biggest financial decisions you will make in your life and your first path to build wealth. Don’t hurry through this process or it will cost you dearly. These are 7 of the most common mistakes I see:
1.Getting a house in a neighborhood that does not support your lifestyle. For example, if you are a young professional couple with kids, why buy into a senior neighborhood?
2. Getting too big or too small a house without considering your health (stairs? no stairs? family size, etc.) Think about relatives and guests coming. How long will they stay? Will they be comfortable? Are there enough bathrooms to accommodate the family?
3. Not putting 20% down. You need this to get a little equity in case you know what happens.
4. Getting the wrong kind of loan. Determine how long you are going to stay in the home and do not purchase the loan with the lowest payment loan but the loan with the lowest interest and fees. That is how you save money on a mortgage loan (despite what a loan broker will tell you).
5. Not repairing your credit rating. The time to repair your credit is before you consider buying a home not after. Clean it up and you will save loads of money since you will get better loan rates. Better loan rates means you pay less interest over the life of the loan.
6. Not considering taxes, insurance, water, utilities, garbage, and assessment fees. Home ownership means you pay all of the extras too. Don’t underestimate these charges. They add up.
7. Not making sure all appliances, electrical outlets, plumbing, lighting, window and roof leaks. Many people rely too heavily on home inspectors who really don’t thoroughly inspect the things that you are going to be using every day. Take the time to turn on and off all of the appliances, check water temperature and flows, look for good sealed windows and insulation, etc. It will pay off in fewer home maintenance fees –especially in the first couple of years.
Once you are in, don’t have buyer’s remorse. Look at the mistakes as a learning experience and look at your home as something you will enjoy for years to come.