Five Costs to Consider Before Buying a New or Resale Home
As with almost everything else in real estate, there’s no simple answer to whether to buy a new or previously owned home. The best way to determine what kind of home will give yo... read more
Buying a home is a big decision that takes into consideration many different wants and needs. In addition to determining basic parameters (such as square footage and price range), it’s important to have a detailed conversation about your top priorities, such as home features, location and lifestyle. Answering these questions is a good place to start and will help you avoid making the following potential mistakes during the home buying process.
1. Underestimating costs
The purchase price is most likely your main consideration; however, you also need to think about several other financial considerations, including property taxes, homeowner’s insurance, utility bills, home maintenance expenses, mortgage insurance (if your down payment is less than 20 percent) and possibly homeowners association fees. You may also need to factor in closing costs—either paid at closing or wrapped into your mortgage.
2. Overlooking important financing details
If you are not a cash buyer, purchasing a home will involve securing a mortgage. Before you apply for a mortgage, check your credit and clean up any issues that might hurt your ability to get preapproved for a mortgage or result in a higher interest rate if your credit score is below a certain level. Then, request loan estimates from several lenders and compare them side-by-side to make sure you’re getting the best terms, including estimated closing costs.
3. Failing to thoroughly check out the neighborhood
Be sure to consider schools, parks, safety, proximity to transportation, shopping, restaurants or anything else that’s important to you.
4. Ignoring resale value
It’s important to consider how other buyers might react to your home if you decide to resell; try to avoid making a purchase you may later regret due to undesirable or hard-to-modify features.
5. Not hiring an experienced and knowledgeable Realtor
Buying a home requires you to think about your needs and desires. Your buyer’s representative will want to know as much as possible about your preferences in order to pinpoint your best options and help you navigate the entire home buying process.
