Real Estate & Mortgage Insights
5 Common Home Buying Mistakes
For most people, their wedding is a magical time, full of enchantment and wonder. But sadly, during that time, the bride and groom often try to make life plans at the same time they're planning their special day. This can cause important issues to get missed or pushed under the rug.
One of the most common things couples often discuss when planning their wedding is buying their first home. Now, I don't have to tell you that buying a home is a topic best dealt with on its own, but when the love bug bites, it can often make its way into the wedding preparations. This is a huge mistake. In fact, this type of mass newlywed hysteria can cause some couples to make five very costly mistakes when they decide to purchase their home.
Newlywed Mortgage Mistake #1
When talks about purchasing a home make their way into a new marriage, they are often met with a tremendous amount of excitement. Dreams of cooking special meals in the large kitchen, images of frolicking in the creek just out back or talk about future holidays with your ever-growing family are just the tip of the iceberg. What often happens is that the reality of the situation is overshadowed by the magic of it all.
One of the biggest mistakes a couple can make is failing to check their own credit prior to applying for their mortgage. Forget about the old-wives tales about points being taken from your credit report if you check it. The truth is that you are entitled to one free copy of your credit report from each of the three big credit reporting companies. This type of credit check is called a "soft pull," and it doesn't show up on your report. If you take the time to check your credit report, you will be able to remove any discrepancies prior to applying for a mortgage. You could ultimately save an interest rate percentage point or two by cleaning up your credit report!
Newlywed Mortgage Mistake #2
Sometimes, the home buying dream can become a reality very quickly! But one thing you should always do first (and what most newlyweds fail to do) is - get pre-approved for your loan before choosing your home. This will tell you where you fall financially and it can help prevent you from seeing homes out of your reach. In addition, a pre-approval tells the mortgage company that you are ready to go and it tells the home seller that you are interested in making the purchase. It helps to speed up the process and you can get any minor bumps out of the way before they show up at closing.
Newlywed Mortgage Mistake #3
Searching for the perfect home is a lesson in patience and how to avoid temptation. Because newlyweds are still riding high on their wedding euphoria, they will often lose sight of that. When the mortgage company tells the newlywed couple that they are approved for $350,000, they're not telling you to go out and buy a home for that amount! This is a trap that many newlyweds fall into - mortgaging too much money. Always make sure that you can afford the home you want to purchase, not purchase the home you want to be able to afford.
Newlywed Mortgage Mistake #4
Starting off your new life together takes some getting used to. It also requires a lot of money! Don't make the mistake of using all of your savings for your home's down payment. Even though you probably received plenty of gifts on your wedding day, you will still have to purchase a number of big-ticket items for your home, which will cost money. Plus, the last thing you want to do is start out your life together with nothing in the bank. Especially when you move into your new home and you discover the hot water heater just sprung a leak and the electrical panel is corroded and the roof needs replaced, should I go on?
Newlywed Mortgage Mistake #5
Sometimes, first-time buyers don't even realize that there are first-time buyer programs and incentives out there. These incentives can help save you money by reducing the amount you need to put down on your home or they can help you get a loan approved if you have sub-par credit. Always look at all of your options before settling on one choice. Discuss all of your financing options with a professional and make the right choice that will benefit you the most.
Buying your first home is an exciting, yet daunting affair. Don't short change the process or you could find yourself spending much more on your mortgage than you should. Keep the wedding plans separate from the home buying dreams and by giving each their own due, you'll find much more happiness and fulfillment in each of these life changing events.
