Top 5 Financial Mistakes of First Time Home Buyers

Top 5 Financial Mistakes of First Time Home Buyers

By siliconindia   |   Wednesday, October 1, 2014   |    1 Comments


Bangalore : The Home buying process seems traumatic and overwhelming with little pitfalls. Owning a home is a life time achievement and an exemplary dream for many individuals. To fulfill their dreams many first home buyers strive hard even though they will commit a few mistakes like choosing the wrong type of home, not working with a realtor, skipping home inspection, compromising important things and many more. Making these mistakes will cost you more consequently; each home buyer should take accountability for their finances. Following are the top financial mistakes made by first time home buyers.

Overspending on housing: Banks qualify buyers based on their credit card score, income level and tax records without considering the amount buyers spend on buying. Without assessing the future and being optimistic many home buyers borrow the maximum amount of mortgage loan larger than they can afford. Many experts suggest that every home buyer should adhere to their original price before lending.

Picking a Risky loan: Before selecting a loan, educate yourself by consulting a mortgage broker or a loan officer to receive requisite information on loans because selecting a risky loan cost you more than you ever predict. There are different types of loans for every situation and person. For example, some loans may cost you lower interest rates, but one should aware their rates may increase gradually.

Neglecting the inspection: Most of the buyers feel thrilled to buy a home and they perform the process hastily and skip the home inspection. Skipping the home inspection is a risky job because this may cause serious problems with unexpected repairs of electrical wiring, plumbing, roof and many.  If you inspect the home before buying then, you can avoid making a serious financial mistake. If you skip the inspection, you are the responsible person for any problem that arises after closing the deal.

Failing to shop around: Check cautiously before you start lending with distinct banks because interest rates and closing costs may differ among the banks (differ from bank to bank).  Compare each quote and consider mortgage rate, mortgage payment penalty and down payment ascertain the best rate and cheapest costs which feels you comfortable.

Thinking you’re pre qualified when you are not: The foremost step for home buying is to meet the lender for a free consultation; it should include strategies of home buying and creating long term financial goals. Many home buyers think that credit card score is enough to lend; it doesn’t mean you are pre approved. Before starting the house hunting for buying every home buyer ought to get prequalified, so that they can amend the mistakes before making an offer on a home.

Buying a first home is the difficult task as it is a largest purchase for many folks. If you aware of these financial mistakes, you can protect yourself from financial pitfalls.

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