Buying a home is, perhaps, the single biggest purchase many people will make in their lifetime. Before putting your John Hancock on the 30 year mortgage, check out these 10 potential pitfalls of purchasing a home.
What’s the condition of the home? The property should be worth the price you paid; otherwise, you are duped. You can have a real estate assessor or an inspector help you out with that one.
Are repairs done? It will definitely cost you more if you will be the one to shoulder on the repairs. Besides, it’s every home seller’s responsibility to do so. Ensure that the fixes are not only superficial. It should include defects in plumbing, heating, and cooling systems of the home.
Are your brokers credible? Ensure that you’re working with knowledgeable and experienced mortgage and real estate brokers. That’s why you should make your own research first before you work with them.
How much will it cost you? And we’re not talking about the home price alone but everything. You will have to pay for the closing costs, processing of the loan, and a lot more. If you don’t want to go overboard with your budget, you should know this thing.
How’s your credit report? You really don’t want to mess with your credit score, especially if you’re applying for a mortgage. It will help you obtain a very small interest rate and good payment terms. Make sure that you can pay your other debts on time and that you haven’t file bankruptcy in the last 5 to 7 years.
What’s your salary? Salary also plays a part when it comes to your mortgage. If you have stable and decent income, you can get a better loan conditions for yourself. If you feel like your mortgage is too high for you even if you have a good credit score, you may want to work on your income for a while.
How much is your interest rate? You cannot take out a loan without interest charges, but it does vary from one mortgage company to another. When you’re looking for loan, make it one of the factors that will determine your decision. You can also watch out for the current interest rate in the market. Ensure that then mortgage interest rate is not far from it.
How much can you afford? It’s always best if you can take a look at your savings account and your earnings before you decide to buy a home. Even if you can afford the mortgage, you still have to allocate whatever amount you have with your utilities, school plans, insurance policies, and a lot more.
Where is the home? You may have the most beautiful house in town, but if it’s too far from work, school, and other necessities, it may defeat its purpose. However, if you want to be far away from the hustle and bustle of the city, then its quiet location may appeal to you.
How much is your down payment? How much you’re going to pay initially will determine the equity you can build right away into your house. If at all possible, pay at least 20 to 22 percent of its total amount so you can avoid paying mortgage insurance. This one can be quite expensive. A huge down payment can also mean an excellent loan.
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