It’s no secret that buying a home is an involved process and a large investment. Whether you’re a first-time homebuyer or have purchased a home before, mistakes that can cost you money are easy to make.
We’ve outlined four common home-buying mistakes so that you can educate yourself on what they are and be prepared to avoid them.
Being Unaware of Your Budget
As with any type of large purchase, budgeting is key. You should have an idea of how much you can afford per month for the mortgage payment. Once you have this number, look at houses priced at or below this number. Start by looking at houses priced near the low end of your budget and gradually explore options that are more expensive, but still within your budget. This is a good way to make sure you’re only viewing houses that you can actually afford to place an offer on.
Not Being Pre-Approved for a Mortgage
Getting pre-approved for a mortgage should be the next step immediately after you decide on your budget (or to help you decide on a budget). This pre-approval is typically a key step to get many realtors to work with you.
A pre-approval will let you know prior to even placing an offer on a house the amount of money that a financial institution will loan you for the mortgage, along with the terms of the mortgage (think: ARM vs. fixed-rate mortgage and the length of the mortgage).
Rushing to Make an Offer
While the housing market can be competitive, rushing to make an offer can cost you thousands of dollars down the line. Before placing an offer, make sure the house fits within your budget and is suitable for your living needs (location, schools, distance to work, etc). While you want to make a decision quickly, avoid making emotional decisions because one or two elements really appeal to you when the overall house might not be the best fit.
Waiting too Long to Make an Offer
On the other hand, if you wait too long to make an offer, the price of the house could have been driven up if other buyers make offers. This can either put you in a bidding war where you will have to pay more than you originally intended to get your dream home, or there is a chance that you’ll miss out on the opportunity to buy the property altogether.
If you’re ready to get started with the home buying or pre-approval process, Camino Federal Credit Union is here to help.
Do you need help deciding which option is best for you? Let us know!
Let Camino help you. We want our members to find the best option that works for their needs. We offer many options for those looking to purchase or refinance a home. Please give us a call at 800-835-3400 to speak with one of our Member Advisors, or contact us for more information. NLMS ID 666196