Home-buying is an expensive process and it can be intimidating. There’s is a good chance you will be paying mortgages for the next 20-years once you decide to purchase a home. So, what mistakes should you avoid when you make this decision?
Buying more home than you can afford
Purchasing a home at the top of your price range will likely mean the cost of homeownership, like property taxes, will be higher. A higher-priced home could force you to keep a job you don’t like, or take on a new one, just to pay the mortgage.
Buying a house before you are financially ready
Ideally, you should wait until you have 20% of the cost of the home saved as a down payment. You’ll also need extra savings to cover unexpected house repairs. You should also take the time to build up your credit score so you can qualify for a good mortgage rate.
Buying when you are going to move soon
As a general rule, you should plan to stay in your home for at least five years. Since you will likely have to pay a six percent commission just to sell your home, you would need to be in your home for several years and have it appreciate in value just to break even.
Choosing the wrong mortgage loan
Shop around for a mortgage loan to get the lowest interest rate possible. Most buyers choose a fixed-rate mortgage over a thirty-year period, while fifteen-year and twenty-year loans will increase your monthly costs but help you pay off the loan faster.