Buying a house is a big and important milestone in every person's life. It might seem like a daunting task, especially for first-time home buyers. If you're wondering what not to do before buying a house, this article will cover some of the most common mistakes that occur when making a purchase and how to avoid them.
What Not to Do Before Buying a House
While it is exciting, buying a house will probably bring you a lot of stress. With that in mind, you should avoid making any other significant changes to your life that could make you even more stressed out and cause you to overlook details until the purchase is finalized.
Don't Change Jobs and Keep It Stable
Since this is likely going to be the largest purchase in your life, having a stable source of income ensures that you will be able to make your loan payments. Lenders like to see consistency in job history and a consistent salary. Banks are extremely wary and unlikely to give a loan in unstable occurrences. If the job change is unavoidable, try to keep it in the same field of work as your current one - this makes lenders less nervous, but ideally you should wait until the house is yours.
Know Your Budget
Almost everyone strives for just a little bit more than they can afford - it's human nature. Keep in mind how much you will be able to spend on a monthly basis. Many banks are willing to loan you what they think you can afford, without taking into account other expenses.
Remember that hidden costs can appear at any time - all the little repairs here and there can pile up and you might not be able to handle it. Be aware of all financial aspects of your home and listen to your financial adviser. Make plans and calculate out your budget before choosing a mortgage.
Keep a Cool Head
You might have been looking for your dream house but were unable to find it. You're ready to settle for something mediocre. This is a decision that you could regret for a long time. No house is perfect, and it's not unusual for buyers to take care of smaller repairs.
Always keep in mind your financial situation and be certain that you can handle the purchase. Ask questions until you know every little detail about the house. Realize that there are some repairs that might be a bit too much for you and know when to move on. Never buy a house out of pure frustration and impulse. Pause your search for a while, cool off and keep looking until you find something that fits you.
No Major Purchases
Taking another loan to buy a new car or any other expensive item can jeopardize your mortgage loan. Your debt-to-income ratio will increase, which is used as a reference on how big of a mortgage you can afford. Making multiple expensive purchases side-by-side is never a good idea. A new car is not going to look appealing to your loan lender and your mortgage loans will drop drastically.
Buying furniture is an expensive investment. It could harm your credit, which in turn harms your mortgage loan. Stick with your current appliances until you obtain the mortgage and are absolutely sure that you can afford the monthly payments that come with purchasing new furniture.
Buying a house can seem a lot more scarier than it actually is. Be smart, use common sense and make a solid plan before going into it. Stay away from anything that could bring you financial instability. Don't be afraid to ask those more knowledgeable for help. After all, purchasing a house should be a fun and unique experience, and you can do it in less than one year if you try hard enough too as well.