Buying a home is possibly one of the biggest monetary commitments you will make in your life. So, it is important that you make well-informed decisions and avoid the obvious pitfalls. Take a look at the common mistakes investors make when buying a home.
- Leaving it to the experts: Relying on expert advice is always recommended, you have to go out and do your own extensive research as well. Make an effort to thoroughly study your mortgage options and the neighborhood you are planning to invest in. Also, being aware of all upfront and hidden costs involved in property buying will help you budget better.
- Dismissing your budget: When shopping for an apartment of your own, you may be overwhelmed with options. You may realize that overshooting your budget by a mere $10,000 may afford you a better home, but it is important to stick by your budget and not get carried away. Remember that apart from your mortgage expenses you will have to meet your lifestyle expenses as well in the coming years.
- Forgetting the additional costs: Though the house itself will require the largest investment, many investors make the mistake of not budgeting for additional costs. Home buying will incur costs like insurance, moving charges, inspection fees, stamp duty and lawyer’s fees. And all of these will have to be paid by you.
- Not being pre-approved: Arm yourself with a pre-approved loan before setting out to buy a home. The pre-approved loan will give you a fair idea of how much you can afford and also help you negotiate better.
- Ignoring the inspection: Rope in an inspector to take a close look at your potential property buy. A home inspector will be able to point out the flaws in the structure and will give you a good idea on what maintenance costs the house will incur in the near future.
- Not knowing your options: Sit down with your loan officer and understand the various options you have while repaying your mortgage. Choose an option that suits your needs and lifestyle the best.
- Don’t seek improvement: A common mistake investors make is to go for homes that have little room for improvement. Go for a house that you can renovate and add to, so that when you do decide to sell it, you can make a neat profit on your initial investment.