The process of buying a house can be overwhelming to many. While you might start the process with your dream home in mind, the reality is that your dream house might be out of reach given your current financial situation. That doesn’t mean you can’t buy a home, just maybe not the one you always wanted.
In many cases, those looking to buy a home make some common mistakes that tend to either slow the home buying process or bring it to a complete stop. In order to not waste your time, here are some common mistakes to avoid during your home buying journey.
1. Find the Right Mortgage Company For You
When you’re looking to make any big purchase, you don’t simply select the first option you find. Buying a house is no different. Make sure you do your research and compare local mortgage companies to find which lender will be able to accommodate your needs. Explore online reviews, talk to some of their clients and do whatever else you can to make sure that you’re working with a reputable organization that has a proven track record.
More: How to Pick the Right Mortgage Company for You
2. Not Double-Checking Your Credit Report
If you have any errors on your credit report, you may get an inaccurate rate. You want to make sure you are getting a quote you actually deserve. The best thing you can do to avoid this is to check your credit report for accuracy. Once a year, you are allowed to request your credit report at no cost from each of the three credit bureaus. Don’t hesitate to dispute any errors. You can also monitor credit score and overall financial health, for free, with the Omega Vault.
3. Not Knowing If You Should Pay Points On Your Mortgage
These discount points are fees paid upfront in order to receive a lower interest rate.
Savings from a lower interest rate can add up to be a lot over time. If you are still contemplating whether to purchase mortgage discount points, talk to your lender. If you are making a small down payment, it is best not to buy points. If you have a good amount of liquid cash, then the decision will depend on whether you plan on staying in your home longer than the calculated break-even point. Your lender can help you determine this.
4. Emptying Out Your Cash Accounts
You always want to make sure you have enough saved for emergencies. When buying a previously owned home, repairs are almost inevitable. You may get into the home and realize it needs a new heating and cooling system; you never know. You want to avoid ending up in a hole. Make sure you have saved enough money to pay for your down payment, fees, and any surprises. Your lender can tell you how much closing costs and other fees will add up to. You can also call around to see how much it will cost to move everything into your new home. After that, be sure you are in a comfortable position to pay for any repairs or surprise costs along the way.
5. Looking For Your Dream Home Before Looking For A Mortgage
Looking at properties you would love to purchase can be fun. Especially when you are buying your first home. You may have seen a few houses you have your heart set on. That is until you find out you were looking in the wrong price range. To avoid this, you should talk to a trusted mortgage lender and get preapproved. Your preapproval will look at your income and expenses. It can be your golden ticket when looking to purchase a home by showing sellers you can back up the offer you are making.
More: Documents You Need for Your Mortgage Pre-approval Application
Conclusion
The most important aspect of buying a home is matching your expectations with reality. That means understanding what you can actually afford first and foremost and then looking for houses within that range. In addition, avoiding the common mistakes listed above will help make for a smooth home buying experience for not only you, but your agent, loan officer, title company and everyone else involved in the transaction.
