Mistakes to Avoid in Buying a Home
Buying a home is an exciting process, and it is one of the most important purchases many people will make in their lifetimes. Knowing how to buy a home, and avoid costly mistakes is important to being successful. One common mistake I see occurs when a buyer gets pre-approved for a loan. They have a good job, and income level, and meet with a lender and are told they are pre-approved for up to a certain amount.
Then, without consulting with their lender, they decide to shop for homes in a radically lower price range, and later find out
that they bought too low and the closing costs are now too high for their available cash on hand. Thus they either must bring more funds to closing to make it happen, or lose the deal. Sometimes the lender cannot go below a certain loan amount with certain programs such as FHA, as it costs the lenders company more in fees than they make on the loan.
So an important lesson in all of this is to stay in good communication with your lender if you change your mind on what you discussed with them originally. Sometimes a lower purchase price doesn’t always result in a lower house payment in the long run either. Taxes can vary, and so can insurance, so you might get a lower purchase price, but find you have a higher house payment that you were hoping for.
So there is a lot of details like this that need to be factored in. Other mistakes I have seen made are to forget about the impact of property taxes, insurance and closing costs in a loan. Other mistakes include failing to factor in lender required inspections such as a termite inspection, or well and septic.
I put the following video together to cover some more of these points. If you would like to find out more information on buying a home in the Southwest Michigan area, give me a call at: (269) 441-8182 or visit my website and send me a message by clicking on ‘Contact Michael’ at the link on top of the home page.