Buying a New Home? Do Not Fall Victim to These Common Financial Mistakes

 Posted on February 06, 2020 in Real Estate

The prospect of buying the home of your dreams is an exciting idea for anyone. Thinking about the specific features you want your new home to have, fantasizing about how you will decorate your home, and considering all the ways that your new home will improve your life can understandably cause anyone to be eager. However, it is important to remember that buying a home will probably be one of the biggest financial decisions you ever make. Rushing this decision can lead to major mistakes that could cause significant financial problems for you down the road.

Purchasing a Home That You Cannot Realistically Afford

Your budget for your new home will largely be determined by your mortgage lender. The lender will determine the mortgage loan based on your credit score, tax documents, and other information. However, lenders sometimes approve homebuyers for larger loans than they can actually afford. Such approvals, in fact, were among the main causes of the housing market crash of 2008 and 2009. If you end up being approved for a mortgage loan that is larger than you anticipated, it may be best not to accept this larger amount. Financially overcommitting yourself in order to buy a more expensive home may lead to years of financial struggle and even foreclosure.

Underestimating the Costs of Being a Home Owner

If you are a first-time homebuyer who has previously rented, you may be shocked when you realize just how expensive owning a home actually can be. Most homeowners will tell you that maintenance costs, utility bills, property taxes, and insurance comprise a major chunk of their yearly expenses. Asking to view the home seller’s past utility bills and finding out about the property taxes and insurance costs in the neighborhood will give you a better estimate of these costs.

Not Getting a Proper Home Inspection

Ideally, every seller would be upfront and honest about the potential problems in his or her home. However, this is simply not the case. The only way to truly know what you are buying is to get a home inspection from a reputable inspector. An inspector can tell you whether or not there are issues with the foundation, roof, plumbing, electrical writing, or other aspects of the home. Skipping the inspection means that you become financially responsible for any issues that you discover after purchasing the home.

Contact a Lake County Real Estate Lawyer

If you are planning to buy a home, you probably plan to obtain guidance from a real estate agent. While agents are valuable resources, the scope of a real estate agent’s advice is limited. For the legal guidance and advocacy you need to ensure you avoid major mistakes during the home buying process, contact an accomplished Libertyville real estate attorney. Call 847-549-0000 and schedule a free phone consultation with Newland & Newland, L.L.P. today.

Sources:

https://www.moneycrashers.com/mistakes-first-time-home-buyers/

https://www.nerdwallet.com/article/mortgages/first-time-home-buyer-mistakes-that-are-easy-to-avoid