POTENTIAL MISTAKES ON BUYING A NEW HOME!
1. Don't borrow the full amount the bank was willing to lend
Because you're approved for it doesn't mean you should buy the most expensive house on the block. A general rule is take 20 percent less than the amount the bank is willing to lend. For instance if your bank or lender is willing to finance a $350,000 mortgage, purchase a $280,000 home instead. Purchasing a home well below the maximum will protect your families financial security.
2. Don't finance a home with the very-low, short-term adjustable rate mortgage
Do yourself a favor and skip the adjustable, creative financing, balloon payments, and teaser loans as you will always have that one constant — your monthly mortgage payment.
A fixed mortgage will be the same 10 or 15 years from now, no matter how the market, interest rates, or the economy changes over time. That predictable expense will help you make other financial decisions down the road that creative financing just can't provide.
3. Don't Use up All of your Cash to Buy the Home
When you buy a home your cash expenses amount to more than just your down payment. There are closing costs, appraisal fees, buyer's broker fees, loan application fees, loan broker fees, inspection fees, and many other costs to factor.
Your down payment and closing costs are your upfront costs. After that, unfortunately, the ongoing costs will also include property taxes, homeowners insurance, hazard insurance, condo, HOA fees, and last but not least - moving expenses. When you finally get the keys to your new home you want to have more than a dollar in your bank account!
4. Wasting your time with foreclosures and short sales, because you heard you could get the Steal of a Lifetime?
Unless you have literally Months to wait for a distressed property to close - that eventually might fall through - as foreclosures aren't a guaranteed bargain - your probably passing up on standard properties that in the long run would be a much better buy. Always keep in mind that the Real Estate Market has few if any Steals or Incredible deals, and that Short Sale may also have higher interest rates!
5. Be very careful and cash smart when buyuing a Condo
Condos are a great investment IF you ask the right questions when buying as in; are there any anticipated changes that could result in an assessment? Is the roof in good shape? Are there any potential conversions/renovations anticipated? You Must Always check with the Home Owners Association and get any potential or ongoing improvements in Writing! Remember once you buy, your locked into any assessments passed on to the owners.
6. Before you buy, talk with neighbors, drive through the neighborhood at night and the weekends.
Most of the time when you purchase a home, the agent will take you to the home during the morning or afternoon. You probably won't hear any loud parties, kids playing basketball in the middle of the street or even a car parked on the lawn. How about dogs barking at night until the morning?
If only people would do a simple drive at night and on the weekends you would save yourself not only a lot of grief but thousands spent on your dream home you now hate.
Serving The Oceanside Communities Since 1979
302 N. Cleveland St.
Oceanside, CA. 92054