Chapter 08: The Dos & Don’ts of Buying a House

Now that you have a better understanding of how to budget for a home, we’ll dive into what to do and what not to do when buying a home. Buying a house isn’t something that you can just wake up one morning and decide to do—for most people at least. You need to understand the ins and outs of homeownership so that you can decide if it’s the right choice for you.

So far in our home buying series, we’ve gone over a lot of important information that first time home buyers need to know so that they can feel more prepared in their buying journey, like the credit score that’s needed to buy a home and what a mortgage is. But now, we’ll be discussing the dos and don’ts of buying a home so you can avoid the top home buying mistakes and choose a home that’s right for you. 

To help you get a better idea of what buying a home entails, we’ve compiled these dos and don’ts into a home buying guide that you can easily reference at any point throughout your home buying journey. Continue reading our first time home buyer guide so you can feel more on track.

Home Buying Don’ts

When buying a home, especially your first home, making mistakes is inevitable. In fact, nearly 75% of buyers wish they’d done at least one thing differently during their home buying process. But although it’s expected to make mistakes from time to time, it’s still important to be aware of what not to do when buying a home so that you can avoid making a big mistake that you’re going to seriously regret down the line.

So, here are some things you should not do when buying a home:

Don’t rush the process

Buying a home is a long journey, but it’s important to not rush the process. Don’t settle for the first house you see or the first mortgage lender you talk with just because you want to get the process over with. Finding your dream home at a price you’re comfortable with takes time. We understand you’re itching to get into your new house, but being patient can help you find something you’ll be happier with the long run.

Don’t forget about additional expenses

When it comes to buying a home, you have to account for expenses that go beyond your monthly mortgage payments. There are a lot of first time home buyer expenses that you need to save for, like:

• Closing costs
• Home insurance
• Property taxes
• Maintenance
• Utilities 

This is why it’s so important to stick to your budget when saving for a home so that you can have enough money to cover all these costs.

Don’t do it alone

Although you might be tempted to navigate the home buying process by yourself, that’s likely going to add to your stress. There’s a reason why real estate professionals exist! Real estate agents are there to help you throughout your home buying journey so that you can find a home that suits your needs and aligns with your budget. 

Not only will real estate agents actually help you find a home, but they can also help with negotiating the price of a home. Don’t be afraid to ask for help when help is needed.

The Most Common Mistakes Home Buyers Make 

You can’t expect that everything is going to work out perfectly when you buy your first home. Making mistakes is unavoidable, but being aware of what not to do when buying a home can help you avoid making them. Some of the most common mistakes home buyers make include:

• Not saving enough for a down payment: Making a larger down payment in the beginning means you’ll have smaller mortgage payments over time. As such, you may want to start saving for a down payment as soon as you start thinking about buying a house.
• Not thinking about the hidden costs: There are a lot of hidden costs that come with homeownership, like homeowners insurance, maintenance, repairs, and utilities. The biggest regret for many homeowners was not accounting for the unexpected maintenance and repair costs that come with buying a home. Avoid making the common budgeting mistake of not thinking about these hidden costs when you start saving for a house. 

• Buying a house you can’t afford: Before you can go ahead and make an offer on a house, you may want to think about if you can realistically afford this house in the long run. Buying a house isn’t just about making monthly mortgage payments—you’ll have a lot of new living expenses, too. You generally want to avoid buying a house you can’t afford and instead, stick with something in your budget.
• Getting the wrong kind of mortgage: There are a lot of different mortgages you can choose from when it comes to buying a house, but a common mistake home buyers make is getting the wrong kind. Depending on your financial situation, you can choose between a 15- or 30-year long mortgage. A 30-year long mortgage might seem like a good idea at first, but you’ll could end up paying a lot more in interest over that time period, depending on your rate. Take your time and shop around for a mortgage program that is right for you.

Home Buying Dos 

Just as there are things you should typically avoid doing when buying a house, there are also things you should do to help you land your dream home at a good price.

So, here are some things that are typically recommended to do when buying a home:

Get yourself financially prepared

Buying a home is probably the most expensive purchase you’ll ever make in life, so it’s important to be financially prepared for what’s in store. That means having an ideal credit score—or as close to it as possible— a stable job, and a comfortable level of savings. 

Different mortgage lenders have different requirements to get a loan, but every lender will check your credit score and employment history. If your credit score isn’t where you want it to be, don’t panic—there are many ways you can raise your credit score over time.

Get pre-approved

Getting pre-approved for a mortgage is also very important when it comes to buying a house. Getting pre-approved for a mortgage will tell you how much you can realistically afford to spend on a home. This ensures that you won’t fall in love with a house that’s completely out of your budget. You can also use a financial calculator to figure out how much home you can afford.

Conduct enough research

Searching for a home isn’t something to take lightly. It may not be wise to purchase the first decent house you look at just because it checks off some of your boxes. You want a house that’s going to check off as many boxes as possible—if not all of your boxes and then some. 

To increase your chances of finding a house that suits your needs, do plenty of research. Figure out exactly what you’re looking for in a house, and then go online and look for houses that meet that criteria. Don’t just think about what you’re looking for in the present, but in the future, too.

Best Decisions in the Home Buying Journey 

There are a lot of important decisions you’ll have to make throughout your home buying journey, such as:

• The location of your home: Location is everything. You can buy your dream home, but if it’s not in a location that you like, you may not end up being happy there. Figure out a location that you can see yourself settling down in. This might mean researching the school system, the local culture, and what kinds of businesses and entertainment in the area.
• The price of your home: You’ll be committing to making monthly mortgage payments for as long as 15-30 years, so you want to make sure your monthly mortgage is a number you’re comfortable with. Buying a house that’s too expensive is likely to cause stress and financial turmoil.
• The size of your home: Even though it might just be you buying the house, you may want to think about your future. Do you want to get married while you’re living in this home? What about starting a family? Do you want to get a dog? These are all important questions to ask yourself when deciding on the size of your home so that you can plan accordingly. 
• The cost of living: The cost of living can differ greatly for each city, so it’s definitely something you want to think about when you’re figuring out where to buy a house. The cost of living will include your utility bills, personal needs, and various other living expenses.

The Bottom Line

After reading this home buying guide, you should have a better understanding of what to do when buying a home, and what not to do before closing on your home. Understanding the dos and don’ts of home buying can help you make smarter decisions, potentially saving you a lot of time and money.

Now you’re ready to move onto the next section in the series, where we’ll be discussing APR and other fees associated with buying a home.

Sources: Statista | Zillow

Source: mint.intuit.com