Looking forward to the future is a good thing. But when it comes to deciding on your mortgage plan, don’t consider your future earnings. Always base your decision on what you’re earning in the present. In short, don’t go for a mortgage plan that doesn’t suit your current financial capacity. If you think your promotion will push through in a few months, don’t let that affect your decision-making process.
Being Too Emotional
Buying a home is an emotional process. You scrimped and saved in order to have enough money for the down payment. But here’s the thing: don’t let your emotional baggage affect your decision-making process. You can do this by having a system in place when checking out houses. Before you leave, make sure you have a checklist of all the things you need to see in a house. Try to be as logical as possible. This way, you get the best value for your money.
Not Thinking Long-Term
For some folks, they think that their first house will be their last. Although this could be true, some people actually end up earning more in the long run and are able to bid on a bigger house on a better street. And of course, there’s always the possibility of financial difficulties. So when it comes to buying your first home, always think about the long haul. Is the house located on a very busy street or will it be tough to sell to families with young kids or elderly children? If so, you might want to reconsider. This way, if the time comes and you have to resell, you can
Also, don’t forget about contingency clauses. These clauses offer some protection for you in case something financially disrupting happen – say, you lose a job instead of getting that hoped for promotion.
Not Saving Up for Down Payment and Home Insurance
Ideally, you should have enough for down payment and other costs like home insurance, et cetera. Although buying a house can be a financially wise decision as opposed to renting, problems could still creep up on you if you’re not careful. So try to lower your long-term housing spending and make sure that you have enough money set aside for a good home insurance policy.
Disregarding Credit History
Some people tend to forget that their credit rating can affect their mortgage interest rates. The better your credit score, the lower your mortgage interest rates will be. If you’re getting a loan, remember that you’ll have a better chance at getting the best rates when lenders see that you can afford to pay on time, every time. So if you’re still saving up for the down payment, do yourself a favor and acquire a good credit rating.
Not Looking For Other Sources of Funding/Grants
You’d be surprised at the number of grants and funding options that are currently available. Not all people are aware about housing grants and it would be wise if you research first about the available grants in your area. Depending on your state, you can either get first-time homebuyer incentives or low-interest loans or a choice between the two. These grants and funding options can differ not just based on your salary but also on your profession. There are certain funding options that can be available exclusively for public teachers, et cetera.