It’s no secret that a home purchase takes significant resources and effort. It might have taken you decades to reach that point where you can buy your own house. That’s why spending your cash on such a huge investment should be done carefully. One mistake can mean hundreds of thousands of dollars down the drain.
The first step to avoiding a financial crisis when buying Overland Park real estate is to know the mistakes you should watch out for. Keeping them in mind will steer you into the right direction.
Miscalculating Your Expenses
First-time buyers often fall into the trap of overestimating what they can afford because they’re not aware of all the expenses they need to consider. They focus too much on the downpayment and monthly mortgage payments that they forget to include additional expenses like closing costs, interest, taxes and insurance.
One way to deal with this is to get pre-approval for a mortgage loan to see how much you can borrow from a lender. However, include in this the additional costs like taxes and insurance. To ensure you have the financial capacity for a home purchase, keep your total monthly payment within 28% of your gross income.
Deciding Solely With Your Heart
Emotions can get in the way when searching for your new home. While it’s important that you feel a certain connection with the property, you shouldn’t let emotions rule you. This could result in a purchase that can give you a headache.
To remain objective yet personally involved, create a list of features you want in a home. Then, choose at least five priorities based on importance. That way, you can narrow down your choices and stick to homes that will meet your needs without emptying your pockets. It’s almost impossible to get all the features you want in a house, so learn to compromise and adjust your expectations.
Failing to Think of the Future
One of the reasons buyers purchase a home is because they want a place to settle in for many years to come. Given this, it’s important to plan ahead. Consider all the upgrades you want to do eventually and check whether the property allows for such additions. Hiring a professional home inspector will help you determine the condition of the house, giving you time to prepare for some changes you need to make the moment you move in.
You should also think about the property’s resale value when buying it. Just because you don’t see yourself selling it in the near future, doesn’t meant you wouldn’t decide to move somewhere else especially if significant life changes take place. To get back a good amount from your investment, you have to choose a house that has positive resale value.
Not Understanding Your Credit Score
You will probably have to take out a big mortgage loan to get that new home. Getting a good amount involves a lot of factors, including your credit score. Many home buyers fail to understand the importance of their credit score before making a purchase. The problem comes when they couldn’t get the money they need because they have poor credit rating.
A credit score of above 720 can give you the best interest rates while 620 and below is the minimum requirement to even get a loan. If you have bad credit due to unpaid balances and missed payments, then you will face some problems. You can, however, improve your credit score before searching for a house, but that means you will have to wait a little more.
These mistakes can be costly. Working with Overland Park real estate experts like T.J. Lamb Real Estate will help you avoid them. We can also guide you throughout the entire buying process, from searching for the type of home you want to making an offer and closing the deal. Call us today at 816-224-4393.
An agency offering exclusive buyer’s agent services like T.J. Lamb Real Estate will remove the stress of searching for the ideal Overland Park area home,