If you are like most, you worked hard to earn and save enough to purchase your first home. You probably have a steady and reliable income, savings in your bank account and a good idea of what you want in a home.
Although you feel confident you can afford monthly mortgage payments, several financial pitfalls lie waiting to disrupt your dream of owning a home. Learning about potential mistakes before you start the buying process helps you avoid them.
Passing on professional support
Many believe they are savvy enough to complete a new home purchase without falling prey to a bad deal. Unfortunately, that is not typically the case. Engage knowledgeable real estate advisors, and consider seeking guidance from a legal professional to reduce your financial risks.
Making other purchases
The period between deciding to buy a home and closing on the deal is no time to make more large purchases. Increasing your overall debt with furniture, vehicle or appliance purchases could impact your loan approval. Plus, you will benefit from some time to adjust to your new financial situation before adding to your debt.
Avoid changing your career track before a home purchase, even if you have a lucrative opportunity waiting in the wings. Lenders look at many factors, including your employment and earnings history. They may shy away from lending to someone that has entered a new industry or field.
These are just a few things to consider before buying a new home. You can set yourself up for success by familiarizing yourself with the local real estate market. We also recommend learning about the legal side of real estate transactions.