3 newbie mistakes to avoid for first-time home buyers

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Buying a new home for the first time is truly exciting. But it can also be a complex transaction as well as costly.

It is important to make smart choices throughout the process so that buying your first home is ultimately a good financial decision that will help you set the stage for building your home equity and increasing your wealth.

And part of it means to avoid common mistakes when buying a home… Although during home buying processKnowing about these three common mistakes in advance will help you avoid problems during the purchase and during the repayment of your mortgage.

1. Unpreparedness for closing expenses

Closing costs can come as a huge surprise to home buyers, and for good reason. The transaction fees and costs associated with buying a home are really high and often range from 2% to 5% of the value of the home. If you are first home buyerit can be shocking if you end up paying thousands of dollars to complete the transaction and obtain ownership.

Unfortunately, if you don’t have the money to close, this can be a major problem. Ultimately, you will have to borrow more money – if you mortgage lender allows it. This would make your loan more expensive over time. Or you may end up struggling to find the money so as not to derail your home purchase.

To avoid this mistake, make sure you ask your lender ahead of time what your final costs will be. You must receive an estimate within a few days of submitting your application for mortgage it shows you what you can count on. Make sure you have the money, or start saving as soon as possible if you don’t.

2. Fall in love with home

Falling in love with a home can be good, but only if you keep your mind. If you decide your home is “perfect,” you are more likely to overpay for it or ignore serious and costly flaws that could become a problem in the future.

Remember, no matter how beautiful a house may seem and no matter how perfect it looks on the surface, this is the right house only if:

  • You pay a reasonable amount for it
  • It’s within your price range
  • It is in good physical condition (or its cost has been refurbished if it is not)

You can compare the market value of real estate and should carefully consider, advance payment and mortgage costs are within your budget before you decide to offer a home – no matter how much you love it after your visit.

3. Excluding contingencies in your proposal.

When you make an offer for a home, you probably don’t want to make a 100% commitment to the purchase without including a few clauses in the sale. Otherwise, you could have serious problems with your home, or you could lose your deposit if it turns out that you are unable to complete your purchase.

You can enable the terms of sale by making your offer subject to certain events. For example, you should probably make your proposal dependent on satisfactory home checkup… This will ensure that you can get a professional to check the condition of the home and point out any problems before you decide to buy it.

You can also make the offer dependent on the valuation of the house, at least the amount you pay for it, so that you don’t end up paying more than the market value. And you should consider including contingency financing to make sure you can get a mortgage before you decide to buy.

By keeping perspective throughout the buying process, including the right contingencies, and preparing ahead of time for closing expenses, you can maximize the chances that buying your new home isn’t something you’ll regret.

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