Mistakes to be Mindful of When Looking for a Home

Blurry Picture of a Home.

Shopping for a new home can be an exciting but somewhat daunting experience. The amount of information you need to know can be mind-boggling. Basic concepts such as how you plan to finance your home, where to look for the best mortgage, and your credit score are just a few of the things on your must-know list. Combine these important factors with your personal preferences regarding size, neighborhoods, school districts, and the cost of buying a home and you have a multitude of things to consider. It is helpful to be mindful of the mistakes that plague many buyers when looking for a home.

Not Knowing Your Credit Score

Every purchase you make using credit contributes to your credit score. The timeliness of your payments is very important, but it is not the only thing that adds to your score. How much credit you have available, what the ratio of debt to income is, and even the amount of inquiries into your credit can have an effect on your numbers. It is important to know what your credit score is before you even start looking for a house. The higher your score, the higher your likelihood of being approved for a mortgage, and the better your mortgage rate will be. Those with higher credit scores typically get lower interest rates on any purchase. Knowing your credit score before looking for a home will help you plan the best financial time to make a purchase.

Failing to Know the Neighborhood

There are so many things to consider when looking for your home that it is easy to overlook some important factors. One of the biggest quality of life issues you should think about is the neighborhood you are looking at houses in. Don't take everything at face value. A neighborhood may look perfect, but you will want to dig a little deeper. Talk to some of the neighbors and ask questions about how long they have lived there and how they feel about the area. Ask the current homeowners why they are selling. Just remember that anything the seller tells you may be biased based on the fact that they want you to make an offer. Look to see where nearby green spaces and parks are located. Is the neighborhood close to stores, the library, the bike trail, or any number of things that are personally important to you? Don't underestimate the value of a great neighborhood.

Not Hiring a Qualified Agent

When looking for a home, many people attempt to forgo adding an agent to the mix. It is tempting, when you are making a purchase so large, to try to save money wherever you can. But trying to buy a home on your own can wind up costing you even more money in the long run. A good agent can do a lot of the leg work for you in tracking down the right house. They can also assist you in obtaining a mortgage, as they usually know the ins and outs of finance and home-buying. Hire a qualified agent and you will save time and quite possibly money as well.

Not Considering Resale Value

The cost of your new home will have a great impact on you for many years to come. A large percentage of people who finance with a typical mortgage will be paying for 30 years if they stay in the house. However, most people do not purchase a home planning to live in it for the rest of their lives. You may have children, or your children may grow up and go out on their own. You may change jobs and need to relocate, or you might just wish to move to a new area. There are many reasons why people sell their homes and start over. Knowing the potential resale value of the home you are looking at should have a part in the decision that you are making. If property values are declining in the area, it may be hard to recoup your investment.

Being Ignorant of Finance Opportunities

Take the time to explore all of the finance opportunities available to you. A traditional mortgage works for many people but is not always the most effective choice you can make. Veterans, first-time home-buyers, people purchasing in depressed areas, and people buying homes that need improvements can all find additional options to finance their new home. There are also a variety of nontraditional mortgage options available. Do your homework and know what you are eligible for. If you have all of the information before you start looking for a home, you will save money and be able to make a better decision.

Too Much or Not Enough Caution

Approaching the process of buying a home with no sense of caution would be foolhardy. A home is a large investment of money and time and a decision that you will live with for a long time. You should approach it with caution, making sure that you are aware of every step of the process. But how much caution is the right amount? You don't want to dive in with both feet, never checking to see how deep the water is. Take the time to look at the facts, have inspections done, and listen to what your agent is telling you. Too much caution is the opposite end of the spectrum and just as big of a mistake. Trust your judgment and the wisdom of your agent. If you can't make a decision, maybe you aren't ready to buy a house. If it feels right, it is time to make an offer. If not, then it is time to move on.