Home Ownership Made Easy: Common Mistakes to Avoid When Buying a Home

Home Ownership Made Easy: Common Mistakes to Avoid When Buying a Home

Purchasing a home is an exciting time, but one that can be burdened with pitfalls. You need to avoid those pitfalls that can cause your excitement to wane. Here is a list of common mistakes that many new homeowners make,
and what you can do to avoid them for home ownership made easy:

  1. No verified mortgage pre-approval: Not doing this means that you may not have a realistic expemistakes-homeownership-resizedctation of price range and budget. Always get pre-approved before placing an offer – it shows the seller that you can afford the home and that the mortgage lender has done their due diligence.
  2. No research on your loan officer: Loan officers are supposed to make sure you get the best terms, explain guidelines, and specify the process. By researching your loan officer, you can make sure that they will do their job professionally and efficiently.
  3. Purchasing based solely on mortgage rate: Your home will probably be the largest purchase you make. However, focusing only on the interest rate is not home ownership made easy. You need to consider the actual price of the home as that is where most of your money will be spent. Consider all aspects of your home price to determine affordability.
  4. Unrealistic expectations about time frame and paperwork: Because you are borrowing hundreds of thousands of dollars, it is prudent to understand how long the mortgage process takes and how much paperwork is required. While your loan officer will inform you of what you need, but obtaining and then processing those documents isn’t immediate. Account for this in your planning.
  5. Using only the listing agent on the property: If you don’t use a buyer’s agent, then how will you know that the person is working without a conflict of interest? Make sure you get an impartial agent to ensure that someone is working in your best interest.
  6. Making large purchases during the process: Making large purchases, such as a car, furniture, or vacations can compromise your liquidity, affect your debt-to-income ratio, and could end your home purchase negatively.
  7. Charging credit cards: Charging purchases to your card, especially when close to your limit, can affect your credit score, debt-to-income ratio, and ultimately, your ability to receive a mortgage. Limit your credit card purchases to the minimum until after you have closed on your mortgage for home ownership made easy.
  8. No money for extras: The mortgage process involves many costs, such as home inspectors, lawyers, moving costs, and more. Not accounting for these costs can mean that you don’t have anything left over for the little touches, such as paint, plants, and outdoor furniture, that make your house into a home. You can avoid this by detailing and incorporating these costs into your home budget.
  9. Making large cash deposits: Because mortgage lenders prefer the funds in your accounts to be present for at least 60 days, avoid depositing larger amounts 3 months before your closing. If you must do this, make sure that the reason for the deposit is documented, as anything out of the ordinary will need to be explained.
  10. Not shopping around for homeowner’s insurance: If you rush to find any homeowner’s insurance, how do you know you are getting the best deal? By taking your time, you can ensure that you are getting what you need at an affordable price. Quick tip: Start by contacting your car insurance company since they will often offer bundle savings.

It’s easy to get caught up in the emotions of buying a house, but that shouldn’t come at your expense. Educating yourself about the process and the people involved in it is the key to making sure you avoid mistakes that can be costly, time-consuming, and stress-inducing.

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