Wednesday, November 11, 2015

Home Buyer Don'ts: Six Financial Mistakes To Avoid

Buying a home is always an exciting process. In today's economy where property prices are climbing to millionaire's club territory, just being able to shop for one comes as a great milestone. 

On the same note, however, home buyers must remain vigilant when shopping for properties to avoid the common financial landmines present in this particular venture. Below are six financial mistakes to avoid. 

Maxing Out Your Mortgage

Most inexperienced home buyers make the critical mistake of maxing out the mortgage amount they receive from the bank or a private lender. 

The size of the mortgage you are eligible to receive from your lender will vary based on several factors including average cost of real estate in the area and the borrower's credit score.

Not Paying Attention To Credit Score

Perhaps the single most influential factor that determines your eligibility for a mortgage is your credit score. Sadly, a lot of people neglect to even check their credit score until their lender asks them about it. 

Your credit score impacts your mortgage's interest rates, which could mean hundreds if not thousands of dollars throughout the mortgage's lifespan.

Disregarding Pre-Approval On Your Mortgage

Getting pre-approved and pre-qualified are two entirely different things. A pre-qualification letter almost comes as a courtesy of banks to their valued customers. On the other hand, a pre-approval letter denotes a higher chance of getting the mortgage amount you asked from the bank. It gives real estate agents and property owners more confidence that you will actually be able to close the deal.

Not Consulting Specialists

In an attempt to save some money, some home buyers skip the services of a professional. Consulting these mortgage experts can give you key information regarding current home mortgage rates in the area and actual properties that they may be interested in. 

Most consultation firms can also give you a complimentary pre-approval letter for future property investments. Be sure to work with experts like those at the Premium Mortgage Corp for the best results.

Ignoring Money-Saving Techniques

In the heat of the moment, most home buyers forget to consider the long-term horizon. This results in getting the wrong type of property at a higher premium. Perhaps there are more affordable digs where you could just add amenities for far fewer Benjamin’s.

Focusing On Cheap Neighborhoods

Neighborhood with cheap housing can be an attractive option for home buyers on a budget. 

However, it can be a liability to purchase real estate within these neighborhoods as crime rates increase and people start leaving the area. The resale value will also likely sum up to a loss on your part.

There are many more financial mistakes home buyers are guilty of doing, but the six common mistakes above should be enough for you to avoid getting slapped by rejection letters on your mortgage applications or paying ridiculous interest rates that can easily send you in bankruptcy.

No comments:

Post a Comment

Join 1000's of People Following 50 Plus Finance
Real Time Web Analytics