You’ve put up your down payment and anticipate your estimated closing costs. But what about the hidden fees you don’t always account for? Be prepared to cover your home inspection fee. Additionally, when applying for your mortgage, some banks charge an application fee. Also, your home insurance company may require a small binder fee. Having a list of potential costs will be helpful for your budget.
Forget Reality TV
When we watch our favorite reality home TV shows, it makes buying a house for the first time seem easy and breezy. You never see the seemingly never-ending search for your perfect home, the emotions behind negotiating before someone else ups your offer, the gut-wrenching anxiety while waiting and reading your inspection report. Many buyers then tend to enter the home buying process with an unprepared air of false expectations. Just keep in mind, when buying your home, the reality is nowhere close to what you have watched on the big screen. If you ever have any questions during the process, speak to a professional such as myself to ease any anxiety or confusion you may experience.
Avoid Major Purchases
Avoid making major purchases while you are in contract on your home! Buying a new car or putting a major purchase such as furniture on your credit card can show fluctuations on your credit score between the time you were approved for your loan to the time you close on your house. Too much fluctuation can damage your loan status.
Keep Your Monthly Mortgage Payment Realistic
When you calculate your monthly mortgage payment, of course, you will factor in your taxes and home insurance policy costs. However, many first-time homebuyers forget to factor in everything! While the mortgage company pre-approves you for a certain amount, you may want to consider not stretching to the top end of your budget. Factor in utilities and expenses you may not currently be paying, such as possible homeowner association fees, maintenance costs (lawn, chimney, upkeep), utilities. How much will you be paying additionally for your electric? Water? Heating and air conditioning? Make sure your monthly budget allows room for all of your monthly expenses. Don’t forget you may be spending more (or less!) for commuting fees. Make sure you don’t get carried away. Make sure you can save backup for rainy days or unforeseen troubles.
These are just a few tips on preparedness when buying a home. It can be a stressful and overwhelming process but the end result is sure worth it. We wish you the best of luck in your first house you’ll make a home. And, as always, contact me with any questions or issues you come across!