Trying to buy a home is exciting and a little bit terrifying, and possibly overwhelming for those unprepared for the work and the details. If you’re new to the home-buying process or just unfamiliar with what’s involved, it can be easy to overlook certain things or make mistakes in judgment that more experienced buyers might know to avoid. Unfortunately, when it comes to home buying, there’s no room to learn from your mistakes on the fly, as any misstep can cost you thousands of dollars or result in a missed opportunity for that home that is perfect for you.
Here are a few things to consider when you’re thinking about purchasing a home.
You don’t need to have previously owned a home to know that they can be expensive, but it’s worth thinking through just how much it might cost for even the most well-maintained house. There are the upfront costs before you even move in, like a down payment and closing costs on the house, and while you might be able to make a smaller down payment, that invariable means a larger mortgage each month and potentially mortgage insurance.
Next are the costs associated with moving, property taxes and house insurance, and any potential renovations and alterations that you might want to make to your new home—even cans of paint can add up. And there will inevitably be unforeseen repairs and expenses that you can’t predict but have to account for regardless.
Prospective buyers can also make the mistake of thinking that they’re in the clear once they’ve been pre-approved for a loan, and plan to pay for the expenses of a new home by opening up new lines of credit. But mortgage lenders check credit again ahead of closing, and a significant change to your credit situation can put the loan in jeopardy. For the duration of the process, buyers should look to pay down debt and balances, and save the shopping until after closing.
Then there’s the mortgage itself. How much house can you really afford? Wants don’t always align with your financial realities, and too many people start looking at the homes they want before figuring out how much they can borrow. Not considering what you can realistically afford each month can lead some to overextend themselves on their mortgage, eventually risking foreclosure, which means generally losing all you have put into the home.
Want to learn more about mortgages and deeds of trust? Check out this Bankrate article, “What is a deed of trust?” that quotes Kevin Frankel, an attorney with Fiffik Law Group, a LegalShield provider law firm. Before you start looking at places, start by calculating your income against debt and other obligations, factoring in how much you can save towards a down payment and how long it will take to do so. You’ll need to have your finances in order to get the loan you want for the house you choose. The old adage “prepare for the worst, hope for the best” applies here.
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In your eagerness to get to the exciting work of looking for your ideal new home, you may decide to go with the first mortgage company that you land on that offers you pre-qualification or pre-approval. While they may be offering you a loan, it might not be the best loan available to you, or the one that’s right for your needs. A home mortgage is a decades-long commitment, and the biggest expense you’ll be carrying forward; it would be foolish to not shop around for the best offer you can get. Especially if it’s your first mortgage, asking others or a professional for help with all the terms is prudent.
Similarly, don’t stop your home search with the first place you find that seems perfect at first blush. As great as it might seem, there may be something better or more aligned with your needs; you’re also likely not the only person looking at or interested in the home, so you have to be prepared for the possibility that yours won’t be the winning bid. Keeping multiple options open allows you to keep the process moving if your first choice goes off the market or has too many problems.
It’s easy to look at a home and see the surrounding neighborhood and fall in love before even stepping foot inside. That infatuation might cause you to overlook some pretty serious issues with the home itself, or convince you that major repairs are easy fixes. While any home is going to have things that need a bit of work, problems with the structure, foundation, heating, plumbing, electrical, and roofing are just some of the red flags that shouldn’t be ignored before moving forward with the purchase process.
Having a thorough home inspection done is part of the closing process, but don’t wait for a home inspector to discover the more easily observable issues. Not every issue or flaw is a deal breaker, and if you’re looking for the perfect home, you’ll have quite the wait unless you can afford to buy brand-new with a warranty. But it’s important to identify every problem so that you can determine what is fixable, and negotiate on the sales price based upon the cost to repair.
Most states require home sellers to disclose known defects with a property to a prospective buyer in the seller's disclosure statement. LegalShield provider lawyer Nathan Serr discusses legal options related to undisclosed defects in a U.S. News & World Report article titled, "Help! I Was Sold a Bad Home. Now What?"
There’s no shortage of potential pitfalls when it comes to buying a home, and even those who have been through the process before can get tripped up if they’re not careful. By being thorough and deliberate, you can avoid mistakes you might have otherwise made in trying to rush through the process. Finding the ideal home with the right mortgage is worth the effort. LegalShield lawyers can help you sort through the complicated issues surrounding home buying.
If you need to back out of a real estate contract for any reason, check out this U.S. News & World Report article that features helpful advice from a LegalShield provider lawyer. Sign up for a membership today to speak to a lawyer in your area.
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Written and maintained by the LegalShield content team, covering legal and identity protection topics for individuals, families, and small businesses.
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