Avoid “Foolish” Mistakes When Buying A Home
If you’re buying a home this spring, you know it’s no joking matter.
Practical jokes are making the rounds in households, schools and offices across America today. But if you’re buying a home this spring, you know it’s no joking matter. A mortgage loan is one of the most complex, high-dollar financial commitments you can make, so it’s important to do your homework and give your purchase careful consideration
In honor of April Fool’s Day, here are the top foolish home buying mistakes and how to avoid them:
Shopping for a home without first getting prequalified. You’ve got to know your budget. Try to avoid making big capital purchases or opening new lines of credit before you get prequalified, because that can raise your debt-to-income ratio. That’s your monthly debt divided by your monthly gross income, which should generally be below 43 percent. Lenders are required to document your finances and debt-to-income ratio.
Getting preapproved also demonstrates to sellers that you are a serious buyer and you have taken the necessary steps to begin the home buying process. It may also make the process smoother and quicker once you make an offer.
Taking on the biggest mortgage you can afford so you can get the nicest house. You don’t want to get into a large house payment that would be hard to cover if you lose a job or have another big expense come up. Always have an emergency fund to cover your mortgage payments for a few months until you get back on your feet.
Buying the nicest house in the neighborhood. Often, the value of the best home in a neighborhood is brought down by the lesser homes, so stay in the middle.
Putting everything you’ve got into your down payment. You don’t want to empty out your entire savings account. Better to keep a cushion for unexpected home repairs.
As you head out for house hunting this weekend, consider one final savvy home buying tip: Make an offer on the first Tuesday of the month. Homeowners are more motivated to sell since they just wrote another mortgage check for a house they no longer want and begin to worry they won’t get any offers from house hunters who saw the house the weekend prior.
If you make adequate preparations you will be on your way to moving into your home, sweet, home