The following is a guest post.
Buying a home is a complicated process. There are forms to fill out, documentation to find, new terms to learn, and appraisals to review. Because people do not typically buy homes on a routine basis, it is very easy to make common home buying mistakes without realizing it. These mistakes can cost you a great deal of money over the years and add thousands of dollars to the cost of your home. Here are some of the most common home buying mistakes that many potential homeowners make.
Choosing The First Lender That You Find
Many people make the mistake of just going with the first mortgage lender that they find. They may choose to use the bank that they have their checking and savings accounts with or choose the same mortgage provider that their parents used without exploring their options. Neglecting to shop around for a loan means that you wonâ€™t know if you are getting the best interest rate that you qualify for. For example, if you visit Newcastle Permanent, you may be able to get a rate that is several percentage points lower that you would receive if you chose to go with your current bank. Check out the offerings of several different lenders before you make your decision.
Not Considering The Fees And Closing Costs
Another mistake that many people make is failing to include the cost of the fees and closing costs in their calculations. These additional expenses can add a considerable amount to the amount that you must pay and if the costs are rolled into the mortgage loan, you will paying interest on these expenses for many years. Ask your lender for a detailed list of all of the fees and closing costs that you will be expected to pay long before it is time to sign a mortgage agreement. This way, you can see how much you will be required to pay and can decide whether you need to focus on a less expensive home.
Buying A Home When You Intend To Move Soon
Buying a home that you do not intend to stay in for a long time is a waste of money. In fact, for most of the first five years of homeownership, very little equity is built up in the home. If home prices begin to drop in your area, you could find yourself in a difficult financial situation when it is time for you to sell. If you believe that you are going to be living in the area for less than seven years, you would be better off renting a reasonably priced home instead of buying one.