Five Mistakes Buyers Make

Buying a home is a big decision and a multistep process that can sometimes feel overwhelming. A handful of key mistakes can not only stretch the process out, but possibly even cost buyers their dream home. Avoid making these five mistakes buyers make when searching for your next home.

1. Not saving for closing costs
   Many buyers consider the down payment their only major expense when purchasing a home. However, there is another major cost to factor in: closing costs. They are usually two to five percent of the value of the home. To put this into perspective, a $250,000 home might have up to $12,500 in closing costs. While some loan providers will roll closing costs into a home loan, interest will accrue on the additional amount over the life of the loan. Buyers are better off saving for closing costs from the outset.

2. Not having realistic expectations

It’s extremely important to have realistic expectations when planning to buy a home. For example, if you can only afford a starter home, it doesn’t make sense to seriously consider luxury homes in the hopes that sellers will reduce prices.

3. Not responding to requests in a timely manner
   Responding to requests in a timely fashion is critical when buying a home. If a real estate agent contacts you regarding a home that might be a potential fit for your family, don’t wait a week to respond. Sometimes great homes get offers within 24 hours! Once you’ve made an offer on a home, respond as soon as possible to any requests from your agent, loan provider, inspector, and anyone else involved with the purchase of your home. Not doing so could cause the deal to fall through.

4. Making a large purchase while trying to buy a house
   When buying a home, loan processors will perform thorough research on your credit history and debt to income ratio. If you make a large purchase on a credit card, it can affect your credit score and debt to income ratio, potentially boosting your mortgage interest rate. While you don’t necessarily need to lock your credit card up while trying to buy a house, it’s a good idea to pay for large purchases with cash whenever possible. If you don’t, you might pay for it later.

5. Not getting pre-approved for a loan earlier

Imagine this: you find the home of your dreams. You want to make an offer, but you haven’t been pre-approved for a mortgage loan. Several things can go wrong. For instance, your lender might tell you the home is out of your price range. It’s also not uncommon for sellers to first accept offers that contain a pre-approval letter since the sale could go more smoothly.

Buyers also learn a lot from getting pre-approved for a loan. For example, they will learn about their debt to income ratio and will have the opportunity to address issues on their credit reports. By addressing these issues sooner rather than later, buyers have a better chance of being able to purchase the home they want and may even be able to save money by securing a better interest rate.

Are you interested in buying or selling a home? Contact us today at 713-364-5883 or info@angelfultzrealty.com.