Tips to Save Money in a Home Purchase: Avoid Making Common Homebuying Mistakes
No matter your income or your homebuying budget for a majority of people a home purchase is the biggest purchase they will ever make. But there are some common mistakes that many homebuyers are making costing them more money on their home purchase than it actually should.
Here are Some Mistakes to Avoid That Can Save You Money on a Home Purchase
Not Having Current Knowledge of Your Credit Score
A large factor in the mortgage interest you will be offered when you apply for a mortgage on a home purchase is your current credit score when you apply. The higher your score, the lower the interest rate. Higher credit scores communicate an ability to pay back money in a timely manner and are seen as less of a risk for loaning out money.
You can access your personal credit score from a number of places and even find tools that will calculate what a mortgage lender might offer you for loan terms with your current credit score.
Not Seeking Pre-Approval
Prequalification and pre-approval are two different things. With pre-approval you are essentially going through the steps of an actual loan approval and this gives you a number of how much money a lender will actually loan you.
Pre-qualification, which many homebuyers seek instead is a process of providing a general overview of your current financial status without documented proof and an estimate of what a lender maybe might probably lend you without taking a deeper look.
Another benefit of getting pre-approved instead of pre-qualified is it can help you to have an edge over the competition when submitting an offer on a home.
Not Shopping for the Best Loan
When a borrower applies for a loan it does not mean they have to take it. Shop around for loans to make sure you are getting the best term for your personal financial situation. A great way to do this is by employing the help of a mortgage broker. They do the shopping for you.
You also want to be careful of stretching yourself too thin with taking out a loan the lender is willing to give what may be just beyond your comfortable budget. Just because a lender is willing to approve a certain amount does not mean a borrower should borrow it.
Not Interviewing an Agent or Not Using One at All
Making sure you have a knowledgeable and successful buyers agent on your side is important. Some buyers believe they can go it alone when it comes to home shopping. Or that they should just simply hire a friend of a friend to help out. You want to make sure you have an agent that is experienced in the area you hope to buy a home and with the specific home type you are looking for.
Expert help goes a long way in this big an important purchase, from finding the right homes within your budget, to helping you negotiate the purchase of the home and make a strong offer.
Buying with Emotion
Some buyers find a home they love and lose sight of the realities of owning that home. Affording a home goes beyond the home payment. When buying a home it is good to ask realistic questions about the property. Some of these questions should include:
Can you afford to comfortably make the mortgage payment?
Can I also afford to pay taxes?
Can I comfortably afford to make other payments as well as pay for needed maintenance on schedule and utilities?
How long do I see myself living in this house?
Are all of the must have needs for daily functioning on a must have a list crossed off or all of the wants crossed off?
Well we actually use the features that we love about the home or are they just nice to have? Will the upkeep of these extra items just cause more stress?
Home buying is nothing to take lightly and the more knowledgeable you are about the process the better prepared you are to make the largest purchase you may ever make.
For more information on purchasing a home in Omaha and surrounding areas please contact us anytime.
More Helpful Buying Info