It’s easy to get caught up in the excitement of buying a home. You already have a picture in your mind of what you want and you can’t wait to find it and make it your own.
However, it’s important to be strategic, as buying a home is one of the biggest financial investments you’ll ever make. Additionally, the average homeowner stays eight years before moving, according to Realtor magazine. That’s great news if you’re happy with your home and the price you’re paying for it — and bad news if you’re not.
To ensure you’re set up for financial success and personal happiness, be aware of these eight mistakes when buying a home.
- Not setting a budget before starting the process. One common first-time homebuyer mistake is buying a bigger home than you can afford. If you buy a home that’s outside of your range and an emergency strikes, it could quickly turn into a financial hardship for you and your family. Keep in mind that 40 percent of Americans couldn’t afford a $400 emergency, which is likely due to existing debt, CNBC reported. Start by determining a monthly mortgage payment you could easily swing, rather than focusing on the maximum loan amount you might qualify to get. Giving yourself some wiggle room helps to mitigate stress when unexpected expenses come up (as they always do).
- Not checking your credit report for errors. Lenders use your credit score to help them decide whether or not to approve a loan and at what interest rate. Make sure the information on your credit report is accurate and up-to-date. Federal law allows you to get a free copy of your credit report every 12 months from each of the main credit reporting companies, TransUnion, Experian and Equifax. Reviewing your credit report regularly can also help you catch identity theft early on.
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