No Regrets: Home Buying Tips for the Would Be Homeowner
When you consider that buying a home is one of the biggest investments you'll ever make, that's a scary regret!
So why do homeowners kick themselves for the decisions they've made in the home buying transaction? Well, there are several reasons.
Not Making A Bigger Down Payment
Trulia's 2013 survey found that 18% of home buyers regretted not having a bigger down payment.
While having a smaller down payment will get you into a house sooner, it does mean higher costs in the long run.
For example, with an FHA (Federal Housing Administration) loan, you only need 3.5% of the purchase price to get into a new home. However, you will have to pay mortgage insurance, too. That tacks on a lot more to your real estate investment in the long run.
Having at least 20% down is optimal. Plus, it will usually get you a lower interest rate.
Not Saving Enough Money
Many people think that all they need is a down payment. Other factors like closing costs and a home inspection are not considered as part of the buying process. In fact, according to NerdWallet, 9% of new homeowners did not feel as financially secure after their real estate purchase.
Not understanding the full cost of getting into a new home, compounded by other expenses can put the squeeze on financial obligations.
Check out online calculators to estimate your monthly mortgage payment. Then consider your other expenses as well. This will give you a more accurate picture of your financial life after closing.
To learn more about real estate closings and title insurance, call Lilly Title & Settlement. 540-414-8763.
In some areas of the country, there is a shortage of homes on the market. Buyers jump the gun and decide not to get a home inspection. After the sale, they are stuck with large repair bills.
What's more, it's best to check out the area schools, the neighborhood, and yes, the crime rate for the area. All of these factors are up to the buyer to check out.
Ask around. Do your homework. Once you've bought the house, it's too late. Take the time to do the research. You want your new homeownership to be a happy one.
Not Buying A Bigger Home
Yes, you love the neighborhood. In fact, you're so focused on one particular neighborhood, you lose sight of a bigger home for less money in another good neighborhood.
This one oversight by homeowners ranked as #1 on their regret list, according to NerdWallet and Trulia. Bottom line. Don't limit yourself to one area. Remain open to the possibility that there could be a bigger house for the same or less money in another great neighborhood!
Not Understanding the Real Estate Financials
Nearly 41% said they had no idea there were so many loan options. And, 19% of Millennials were surprised at how long it took to buy a home. An additional 15% were surprised by the hidden fees like home inspection and title insurance.
Other surprises included:
- Underestimating closing costs
- Not researching their credit histories. They missed a black mark on the report, which led to a higher mortgage rate
- Not comparing mortgage lenders to get a better rate