From picking out the right house to finalizing the deal, there is a lot to consider when buying a house. A lot of us imagine finding the dream house we’ve always wanted and jumping after it, not fully realizing what we’re actually jumping into. Others don’t fully understand the buying process and make mistakes along the way. With real estate, you need to be prepared. The financial stakes are high, and making a mistake could cost hundreds to thousands of dollars.
To make sure you don’t end up in a financial blunder, here are the top 3 mistakes I see buyers routinely make in the Northern Virginia area:
1. Spend the Maximum on Housing
As you start your home search, you’ll probably get pre-qualified for a mortgage loan (showing you how much can borrow). Your lender will explain the absolute maximum that you can get, and often buyers will start looking for homes at that price range.
Mistake: You leave yourself with little wiggle room in budgetary changes. What happens if you lose a job, take a small hit to your income, or expect future expenses (such as children)? By borrowing at your absolute maximum, you could potentially put yourself into financial strain if you income changes.
Solution: Determine your own monthly budget before meeting a lender. Only you know what your plans are for the future, and you know what you’re comfortable at. With that information, talk with your lender about hitting that mark.
2. Miscalculating Closing Costs, Property Taxes, Insurance, Etc.
If you’ve ever rented, you know there was generally one payment – the rent (and maybe renter’s insurance). Buying a home is different. With it comes an array of additional costs on top of your mortgage payment. Things like closing costs, homeowners insurance, property taxes, and HOA fees all become your responsibility. What started as a $1200 mortgage payment can easily become a $2000 house bill.
Talk with your agent and do a little math. Get quotes for insurance premiums and estimates for closing costs. Make sure the amount you will need to pay every month rests comfortably with your budget.
3. Taking Advice from Outsiders
There are a lot of choices when it comes to buying a house. Each one is different and you’re looking for the one that matches your needs the closest. Undoubtedly, you’re going to ask for outside opinions from either friends or family. Even if you don’t ask, they may still offer their opinion.
Though it’s good to have a fresh opinion to keep you anchored in reality, it’s important to stick to your guns. It’s you, not your friends or family, that has to live in the house for the next 5-10 years. Heed their advice, but understand that it’s just advice. Pick a home that matches what you need and agrees with your monthly budget.
How to Avoid Common Buying Mistakes
The home buying process is complex and it takes a good real estate agent to lead you through it. The easiest way to avoid making mistakes is to pick the right agent. Make sure they are qualified to help you buy a house, and that they know the market. For more advice or if you’d like to see how we can help you buy a house in Northern Virginia, contact us today.