Buying a home - seven painful mistakes to avoid.
Buying a home - seven painful mistakes to avoid.
For most of us, buying a home is the biggest investment of our lives. You are likely to
spend 25 to 40 percent of your income for many years to come, so it is much better to educate yourself to make good decisions, rather than feel the pain of mistakes; mistakes which could have been avoided.
1. Signing documents without reading them.
Since it is almost impossible to read all the forms and documents at the time when you are closing the deal, you should familiarize yourself with the standard paperwork that is commonly used, and make sure you understand it completely. Your mortgage broker can provide you with all standard documentation ahead of the closing.
2. Not being pre-approved.
In a situation where you compete with other potential buyers, it is essential to be pre-approved for a loan. It shows the seller your ability to get financed, and the seriousness of your offer.
3. Using the same agent who also represents the buyer.
The job of a seller’s agent is to negotiate the highest price. That simple fact causes a conflict of interest if you let the same person represent you as well.
4. Verbal agreements usually can not be enforced.
Whenever you have spoken agreements regarding the deal, but later are asked to sign papers that don’t include the details of these agreements, or say contrary things, do not sign them. What is written always has more validity in the eyes of the law, even if spoken arrangements were witnessed by other people.
5. Choosing the lender with the lowest interest rate.
Consider the full cost of the home loan, including the discount points and the loan origination points, as well as, other mortgage fees. By law, you should receive a Good Faith Estimate within a few days of turning in your loan application to the lender. It will outline all fees associated with the loan. When closing the deal you should not be tricked into paying more fees than what was stated in the original Good Faith Estimate.
6. Skipping home inspection.
You are not only going to be in a better position to negotiate possible repairs you would like to have done before closing, but you will also have a piece of mind knowing that the property has no major problems with plumbing, roof, termites, etc. Having a professional inspection done can save you money and headaches.
7. Not shopping for insurance ahead of time.
Home insurance premiums can be costly, and it takes time to find an affordable quote. Sometimes, insurers require some upgrading in order to underwrite the home policy. Start shopping for home insurance as soon as your offer gets accepted. You can check with the company that has the current policy, but get other quotes as well.