Buying a new home is one of the most exciting moments in your life. You can imagine yourself growing old and going through all the major milestones of your life there. When you make even one of the more common mistakes that other buyers made, though, you won't be as happy in that home. These mistakes can leave you paying more money than you should and cause you some major heartache. Before you start looking at homes for sale, make sure you know which mistakes to avoid.
Not Getting Pre-Approved
Most banks and mortgage lenders have a pre-approval process that lets you apply for a mortgage. They look at factors such as how much you make each month and your expenses along with your credit history to determine how much you can borrow. When you find a house that you love, you can make an offer on it and start the buying process without tracking down a lender and losing it to another ready buyer. Once you see how much you can borrow, compare that amount to your costs to make sure that you can afford it.
Ignoring the Neighbors and Neighborhood
Some buyers fall in love with houses and overlook the possible problems with both the neighbors and the neighborhood. The people who live nearby will be your neighbors for years. You'll want to make sure that they keep their lawns in good shape and that they don't throw wild parties or have screaming matches in the middle of the day. It's often helpful to drive by a few times during the day and at night as well as on different days. This helps you see what the neighborhood feels like outside of the open house that you attended.
Putting Less Money Down
A common mistake that some make is that they make a small down payment when they buy a home. They use the rest of the money that they saved to cover their moving expenses and their other costs. When you make a small down payment, you'll pay more in the long run because the lender charges interest on the total amount that you owe. According to QuickenLoans, you may need to pay for insurance outside of what the lender offers that will add to your costs. It's best to make as high of a down payment as you can afford when buying a new home.
Choosing the Wrong Mortgage
Mortgage lenders offer loans that last for 10 to 30 years. With a 30-year mortgage, you have 30 years to pay off your loan, which will significantly reduce your monthly payments. The downside is that you pay more interest throughout the loan. You'll also find both fixed-rate and adjustable-rate mortgages. With a fixed-rate mortgage, your interest rate will always stay the same. Adjustable-rate mortgages fluctuate based on market factors and may help you save some money. Avoiding all of these common mistakes can help you buy a home that feels like a dream even after years.