5 Mistakes To Avoid When Buying A New Home

Global Capital Partners > Uncategorized > 5 Mistakes To Avoid When Buying A New Home

Buying a new home can be very exciting and overwhelming at the same time. And it should be, as it is one major milestone in life. It requires careful planning and consideration, in order to make the whole process smooth. Any mistake, especially with regard to finances, could prove to be colossal.

Here are five mistakes that you should avoid when buying a new home:

Not hiring a real estate agent

There are several advantages of hiring a real estate agent.

Firstly, a real estate agent will be able to show you houses in localities and areas which you hardly ever considered. Secondly, he/she will find you houses that meet your requirements. Third, they get you a house at the best rate.

In short, a real estate agent will get you the best house at the best price. There is also a lot of paperwork and documentation involved in the whole process; you won’t have to deal with it any of it.

Not shopping around for financing

Your own bank may be your first choice when securing a mortgage for the new home. However, different lenders have different considerations when deciding on the interest rate, so the interest rate varies greatly.

Your own bank may be your first choice when securing a mortgage for the new home. However, different lenders have different considerations when deciding on the interest rate, so the interest rate varies greatly.

Making little down payment

Making as little down payment for your new house as possible may sound very attractive, but it can costly dearly in the future.

Firstly, low down payment on your new home will increase your insurance premiums as you’d become a high-risk client. Secondly, it may also affect the interest rate of your mortgage.

Buying a house more than you can afford

Big and beautiful houses may catch your fancy. You may be tempted to take out huge mortgage to buy a bigger house.

As a general rule, do not buy a house which will cost you more than 30% of your monthly income (including insurance and mortgage payments).

Spending less than 30% of your income will give you and your family a much-needed financial protection and you can build your savings because of the reduced expenses.

Selling your current house before buying a new one

Many homeowners sell their house before they buy a new one. This is because they are looking to pay off their current mortgage and want to have enough cash on hand to make a down payment on the new property.

However, this is a costly choice. You will have to arrange temporary living accommodations for your family which is an added expense. Combine that with the cost of moving the household furniture and item to the temporary residence and then to the new home.

A much better way to deal with this situation is to obtain a bridge loan and make a down payment for the new home. Once the new residence is secured, you will be able to get mortgage on the new home to make the complete payment. After all this is out of the way, you can sell your old home, pay off your previous mortgage and move into your new home without any hassle.

Contact us today if you are in need of a bridge loan for your new property. We are one of the leading hard money lenders in the country and have helped numerous homeowners make their smooth transition to their new homes.

Leave a Reply