Home Buying Mistakes - Save Money on Home Buying

Here is how to save on a new home, whether you are a first-time home buyer or past homeowner.  We made it easy by providing you a breakdown and explanation of these key activities which will save you lots of money on your next purchase. 

Your Credit Score

Your credit score is one of the most important factors in your home purchase success.  Most home buyers look at their credit score as "Approved or Declined", such is a myth.  Your good credit score may entitle you to a lower interest mortgage loan or even a choice of which mortgage lender to choose from, it helps put you in the driver's seat.  A lower interest mortgage will save you lots of money and help you build equity in your home faster.

 

Preparing Your Credit For Future Home Purchase

Ways you can prepare your credit in advance in order to qualify for a mortgage and receive the best rate possible:

  • Make sure that all the credit data recorded is accurate.  You can request a copy of your credit information from companies like EquifaxTransUnion and Experian.  Take the time to clear your credit and update your records.  Look out for:
    • Any personal contact information that is inaccurate and needing updating.
    • Are there any credit accounts in which do not belong to you or those in which you did not apply for or open.
    • Are there any redundancy in accounts or loans, any duplication of credit records.
    • Are there any credit accounts in which you have closed in the past or satisfied the loans.
  • If you have any debt that is in collection, make good on it.  You do not want "collection" status on your credit report.  
  • Always have a savings account with reserved cash. Lenders frown on large withdrawals or deposits that cause your cash account to fluctuate. 

Partner With An Agent

A Realtor or Real Estate Agent is a cornerstone to finding the right home at the right price, and more.  One of the biggest mistakes homebuyers make is overlook the value of a qualified realtor or real-estate agent.  A smart home buyer knows that they don't know what they don't know hence, they seek the "secret weapon"... a realtor.  Here are some invaluable benefits of partnering with a qualified realtor from a local real estate agency.

Real-Estate Agents Cost Nothing

A realtor or real-estate agent costs you, the buyer, nothing.  Yet, their services are invaluable both monetarily and personally.  A real-estate agency which has qualified local agents can provide you with the following advantages where those who seek to buy a home alone are missing. 

  • Time, think of the hours you would be spending in searching, reviewing, contacting the seller or seller's agent etc.  With an agent you would be enjoying time with family or personal activities while the agent is out searching fore your exact fit.
  • Client priority.  Often agents are knowledgeable about upcoming homes for sale.  These "not on the market" homes are often sold and go under contract immediately with the agent's client.  This is happening daily in a market which lacks inventory and has high demand. 
  • Resources, a good real-estate agency will provide a client all the resources needed to succeed in purchasing a home. Your realtor along with the agency will provide or assist you with:
    • A local mortgage lender and mortgage pre-qualifying documents.
    • Reports on local schools, crime, local socials and entertainment, commuting, future planned growth and more.  Remember you don't know what you don't know!
    • Comparables, offering, negotiation and legal contract.
    • Inspection is a must and should not be passed on.  A local agent who works the area understands and knows what to look for.  Such agent knows the typical problems and how to find them.  More so, an agent often partners with a trustworthy inspector that is on YOUR side not the seller's side.
    • Appraisal and closing documents.  Your agent will assist and guide you from discovering your home purchase goals through the closing process.  A good agent will communicate with the closing agency to save you time and provide them with all they need to make your home buying process efficient and smooth.

You simply can not put a price tag on the services a qualified real-estate agent provides, however, if you decide to find and purchase a home alone, your mistake or oversight could be costly.

 

Down Payment 

Your down payment percentage could save you more than you think.  If you purchase a home and place a down payment of 20% or more, you will not be required to purchase PMI (Private Mortgage Insurance). PMI can cost as much as $280.00 per month if your mortgage loan is $400,000.00, that's a heft monthly liability. 

 

 

Stay True and Discipline

A home buying process can be emotionally overwhelming and those emotions can often side track your plan.  Such risk and mistake is more likely to happen with first time home buyers where emotions blanket the discipline.  Some of those mistakes are:

  • Over extending the budget
  • Compromise with future regrets
  • Over pay for a home
  • Commit to risky or expensive loans
  • Willing to accept the home's defects. Buy "AS-IS".

 

You can save thousands of dollars if you properly prepare for the home buying adventure.  Those who plan and prepare in advance are often rewarded by their effort and avoid the common pitfalls.  

 

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