home buying mistakes could cost you money

Frequent mistakes made by home buyers prior to purchase

Buying a home is a complicated and expensive process, and not one with which most consumers are overly familiar. People don’t buy houses ever couple of years, as they do with cars, and the process is far more complicated. That being the case, it is quite easy and common for buyers to make mistakes while going through the process of shopping for a home. Some mistakes are minor, but others can cost you a lot of money if you aren’t careful.

Here are some things you should consider when buying a home:

• Check your credit ahead of time, and improve it if necessary - Your credit history and score are everything. Lenders are going to look at your history of paying bills on time and they are going to use that history and your associated credit score, to determine if you will receive a loan at all, and if so, at what terms.

• You should order a copy of your credit report and credit scores from all three major credit bureaus before you start the house hunting process. You can clear up any errors on your report that may be keeping your score artificially low and you can pay any delinquent bills that may be hurting you. Doing this six months to a year ahead of time will help tremendously when it comes time to get a loan.
• Buying too much house - Lenders have a tendency to crunch numbers and tell you that you can be approved for a house payment of X dollars per month. Don’t just accept that; decide if you can really afford to spend that much money. A lot of people go ahead and take the lender’s word for it and end up with more loan than they can comfortably repay. The end result is a house with no furniture and an endless diet of peanut butter and jelly sandwiches. True, your income may increase in the future, making the home more affordable sometime down the road. But what about now? Make sure that you can pay with enough left over to live comfortably.
• Failing to look out for other expenses - It’s not just the house you buy when you take out a mortgage, it’s everything that goes along with it. That includes insurance, appraisals, loan fees, discount points and more. After you move in, there will be property taxes, home repairs and maintenance, neighborhood association dues and more. Owning a house is a big obligation, and it involves continual outlays of cash. Failing to plan for that can make living in your home quite uncomfortable.

Owing a home is the American Dream, and studies show that most people who have their own houses are generally happier than those who rent. Buying a house is a serious financial obligation, however, and one that will require that you be diligent for up to 30 years while you pay down the mortgage. Failing to plan for contingencies ahead of time can make it much harder to buy than if you plan ahead.