On the list of significant life events, buying a house is way up at the top of the list. It’s a huge financial step, and owning a home will affect your lifestyle.
Considering that you will most likely be paying down that mortgage for the next 15 to 30 years, you will want to do everything you can to ensure you don’t regret your home-purchasing decision, especially avoiding common buyer mistakes whenever possible.
And the best way to do that is to learn from the mistakes of others! To help you out here are the top 5 mistakes buyers make when buying a house in Boston.
1. Not Getting Preapproved
A common mistake buyers make is to simply assume that you will get a mortgage for a house. Let’s say that you have a steady income, low debt, and a good payment history, and figure that you’re well on your way to qualifying for a mortgage, so you cheerfully set out on your home search. But sometime, it turns out that after all that time and energy invested in home shopping, you learn that you can’t qualify for as much financing as you need to buy that dream home.
You might assume that you’ll be approved for a mortgage loan based on your steady income, your low debt-to-income ratio, and your high credit score – but the seller probably doesn’t know that. The only way to prove to the seller that you’re a qualified buyer is to be preapproved.
Plus, you lose a lot of negotiating leverage without having that preapproval letter in-hand when you set out on your home search.
And don’t get tripped up here – prequalified and preapproved are two different things.
Prequalification means that you simply told your lender your financial story. Preapproval involves submitting a mortgage application, complete with providing verifying documents. Preapproval from a reputable lender is key. Presenting this shows the seller that the buyer has already set the wheels in motion and is serious about making [the deal] a reality.
2. Considering Only One Lender
When it comes to mistakes buyers make on the financing end, considering only one lender is a big error. As with anything else, it pays to comparison shop.
Going with the first lender can wind up costing you a lot of money over the long haul or, at the very least, slow the whole purchasing process down. First-time buyers might get a mortgage from the first (and only) lender or bank they talk to, potentially leaving thousands of dollars on the table. A good mortgage loan officer can look at your situation and diagnose any potential roadblocks ahead to give you a clear understanding of your home-buying options.
The more you shop around, the better basis for comparison you’ll have to ensure you’re getting a good deal and the lowest rates possible.
It’s best to talk to a minimum of three different lenders and possibly a mortgage broker. You’ll want to compare interest rates, as well as lender fees and loan terms. And don’t forget to consider customer service because that’s always an important consideration.
3. Buying Too Much House and Not Factoring in All Costs
It’s not at all uncommon for homebuyers to purchase more house than they can actually afford. This is one of the main mistakes Boston buyers make that end up resulting in buyer’s remorse. Or, even worse in this case, if you fall on hard financial times, you might lose the home altogether,
In calculating affordability you have to factor in a lot more than just the monthly mortgage payment. There are many “hidden” costs involved in buying a home, for example:
- Closing costs
- Private mortgage insurance
- Homeowners insurance
- Property taxes
- HOA / Condo fees
- Maintenance and repairs
To get a good handle on what purchasing the home will really cost and whether you can actually afford it, talk to our agents at NextHome Titletown Real Estate. We can help you run the numbers on such things as insurance, taxes, and utility bills. To find out more, just call (617) 657-9811.
4. Concentrating on the House Versus on the Neighborhood
Everything is about location. Think twice about offering on that amazing dream home in a terrible neighborhood. Your property might be exactly what you’ve been seeking, but the immediate world around you will affect your enjoyment, happiness, and property value.
Buyers also often forget that they will be living not just in the house, but in the neighborhood as well. This mistake buyers make means that they wind up loving the home, but hating the neighborhood.
When you are nitpicky about a home’s cosmetics, you can be short-sighted if you wind up in a neighborhood you hate. Selecting the right neighborhood is critical to your life and family development. The goal is to find a place where the culture and values of the area match yours. You can always renovate a home, but it’s very difficult to move it entirely.
It’s better to have the worst house in the best neighborhood than the opposite. You can always renovate and add that third bathroom or finish the basement in a home that needs repairs, but you can’t transplant it to a whole different part of town. Get to know the personality of the neighborhood, lean on your real estate agent for help and advice, and determine whether it will be a good fit.
5. Not Using the Right Real Estate Agent
Perhaps the most disastrous of the mistakes buyers make when buying a house in Boston is not using the right agent. We hear the stories all the time – you bought a new home and used your cousin or your best friend as the agent. They wrote up an offer, it was accepted, and they collected a big commission. Then, when it came time to selling your house, that same cousin or friend didn’t know the market well and couldn’t get your home sold. Yikes!
Certainly, you don’t want an inexperienced or incompetent agent, but you need to consider a lot more than experience and ability. First, you need a local real estate agent, one who thoroughly understands the area where you want to buy. In addition, your agent should be accessible and always looking out for your best interests. At NextHome Titletown Real Estate, we have the agents who can provide what you need. To discover more, send us a message or give us a call today at (617) 657-9811.
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