Tips for homebuyers
April 4, 2014
For most people around the country, nothing is quite as exciting as buying their first home. Not only is it a place to hang your hat after a day of work, but a first home is often where most couples start to build or grow their families. But shopping for a home isn't always glamorous. There are a number of potential pitfalls and headaches you'll need to avoid in order to smoothly navigate the field.
Brenda Payne, a Philadelphia resident, can relate to those who have experienced homebuying troubles. She told CBS affiliate KYW of the various difficulties she's had with her home after she bought it? “It's been an emotional roller coaster,” Payne said of her experience. “I've had days of crying and then days of today they put up a rock fireplace and it was elation, you know you start to see it come back together. Ok we're going to get there.”
Potential homebuyers need to exhibit patience and not run into a purchase.
Payne said some of the problems, which included faulty wiring, has cost her thousands of dollars in addition to her closing costs.
“We found electrical code problems, plumbing code problems not vented right, not angled right, wires that were in the walls that were just black taped and not wired right and stuff like that,” Edward Christensen, Payne's contractor, told KYW. “Then we said well we need to check other walls and then when we did it just slowly kept growing.”
Home buying mistakes
Payne claimed her biggest wrongdoing was using a real estate agent who represented both her and the seller, which is a big no-no according to most real estate experts?
Angie Hicks, founder of Angie's list, told KYW that prospective homebuyers need to evaluate all of their options independently. That includes doing homework on Realtors and mortgage lenders, not to mention getting a home inspection before making a purchase.
“Over the years, the one thing I have learned is people tend to wait until the last minute to make a decision, finding a home inspector, for example,” Hicks said. “You want to do that at the beginning of your home search – before you're under the time crunch of having to get the home inspection done in a certain number of days.”
While it's fine to buy certain items—food, clothes and entertainment—on impulse, you never should expedite the buying process of a home.
Moneycontrol.com, an affiliate of CNBC, reported that potential buyers should carefully plan out all of their expenses before pulling the trigger on a purchase. There will be a ton of extra costs in addition to your down payment, including moving fees, brokerage and legal costs, electricity meter charges and any registration fees.
Preparing for all of these costs can give you a much better idea of what you can or can't afford, and it's advantageous to find out sooner rather than later.
Understand what you can afford
If you want to know how much you can afford based on monthly mortgage payments, Fannie Mae recommends that buyers spend no more than 28 percent of their monthly income on housing costs. If you go much higher than 30 percent, you'll be at a greater risk of losing your assets or becoming house poor.
It's also important to note where you live can impact the amount you will pay in property taxes and insurance escrow. According to the Insurance Information Institute, the average yearly premium for insurance escrow can range from $477 in Utah to $1,372 for Texans.
In order to grasp an idea of what you might pay for an affordable home insurance plan, contact SelectQuote for an estimate.