For most of us, buying a home is the biggest investment of our
lives. You are likely to spend 25 to 40 percent of your income
for many years to come, so it is much better to educate yourself
to make good decisions, rather than feel the pain of mistakes;
mistakes which could have been avoided.
1. Signing documents without reading them.
Since it is almost impossible to read all the forms and documents
at the time when you are closing the deal, you should familiarize
yourself with the standard paperwork that is commonly used, and
make sure you understand it completely. Your mortgage broker can
provide you with all standard documentation ahead of the closing.
2. Not being pre-approved.
In a situation where you compete with other potential buyers,
it is essential to be pre-approved for a loan. It shows the seller
your ability to get financed, and the seriousness of your offer.
3. Using the same agent who also represents the buyer.
The job of a seller’s agent is to negotiate the highest
price. That simple fact causes a conflict of interest if you let
the same person represent you as well.
4. Verbal agreements usually can not be enforced.
Whenever you have spoken agreements regarding the deal, but
later are asked to sign papers that don’t include the details
of these agreements, or say contrary things, do not sign them.
What is written always has more validity in the eyes of the law,
even if spoken arrangements were witnessed by other people.
5. Choosing the lender with the lowest interest rate.
Consider the full cost of the home loan, including
the discount points and the loan origination points, as well as,
other mortgage fees. By law, you should receive a Good Faith Estimate
within a few days of turning in your loan application to the lender.
It will outline all fees associated with the loan. When closing
the deal you should not be tricked into paying more fees than
what was stated in the original Good Faith Estimate.
© iStockphoto.com - EricVega
6. Skipping home inspection.
You are not only going to be in a better position to negotiate
possible repairs you would like to have done before closing, but
you will also have a piece of mind knowing that the property has
no major problems with plumbing, roof, termites, etc. Having a
professional inspection done can save you money and headaches.
7. Not shopping for insurance ahead of time.
Home insurance premiums can be costly, and it takes time to
find an affordable quote. Sometimes, insurers require some upgrading
in order to underwrite the home policy. Start shopping
for home insurance as soon as your offer gets accepted. You
can check with the company that has the current policy, but get
other quotes as well.
See also: mortgage
home loans, home
loan shopping, home
equity and taxes, why
Related topics: HUD
home buying guide, home