The 7 Top Home-Buying Mistakes You Should Avoid
Insanely low mortgage interest rates—and the knowledge that they’ll eventually go up again—make a lot of people feel like it’s time to buy a house right now.
Buying a home is a major purchase (to put it mildly), and there are plenty of ways to trip up. But don’t worry—we’ve got your primer right here.
1. Don’t … buy a house if you’re planning to move again soon.
If you’re a renter, it can be frustrating to write that rent check every month and have no home equity to show for it at the end of the year. But if you aren’t certain that you’re going to stay put for a few years, it’s probably not the right time to buy—equity or no equity.
What to do: If you aren’t in an area with a strong rental market that would allow you to cover the mortgage on your home if you move elsewhere, then stick with a rental for now.
2. Don’t … bust your budget.
Shopping for houses can make you a little giddy. Look at this one and that one! For a little bit more, you could get granite countertops……You’re dealing with such large numbers when you’re browsing real estate that it might not seem like such a huge deal to stretch another $10,000 or $15,000 to get the home you really love. But that’s not a game you want to play.
3. Don’t … forget about added costs.
Buying a home isn’t just a matter of replacing a rental payment with a mortgage payment. There are also maintenance costs, utilities (which will likely cost more) and property taxes.
4. Don’t … put down a nominal down payment.
Even with lenders tightening requirements to qualify for a mortgage, it’s still possible to buy a house with as little as 3% down. That’s not necessarily a bad thing, but it does mean that you’ll have very little equity in your home when you first move into it. So if something comes up, and you have to sell, you’ll end up owing more than you can get out of the sale once you factor in closing costs. It puts you in a precarious position. Even if that doesn’t happen, you’ll have to pay private mortgage insurance (PMI) every month until your equity in the home exceeds the 20% mark—and that could take years.
5. Don’t … neglect to get everything in writing.
You wouldn’t be the first home buyer to assume that the kitchen appliances come with the deal—only to discover an appliance-free kitchen on the final walk-through. Common points of contention: window treatments, hot tubs, light fixtures, shower and bath fixtures, ceiling fans and big appliances, such as washers and dryers. Replacing something you thought was staying could cost hundreds, so it’s not a small thing.
What to do: Go through your contract with a fine-toothed comb. If the item that you expected to be there isn’t, ask about it—and get it added in writing.
6. Don’t … skip the inspection.
Even if the home looks like it’s in winning shape, it would be foolish to skip a thorough once-over by a professional.An inspector is there to spot the things you don’t know to look for, like if the chimney is in great shape or whether those little cracks in the foundation are a big deal. He’ll look for signs of water damage and check the insulation in the attic. If there are conditions that will need repair, you may be able to negotiate with the seller to drop the price. In other words, the inspection is worth every penny.
7. Don’t … think a brand-new home entitles you to brand-new everything.
The people buy a nice house, Look around then think we should buy…… It’s a mistake to feel like you suddenly have to upgrade all of your stuff to match the shiny new home.