Even with the help of a trusted real estate professional, it’s easy to fall into some common traps when you’re buying a home. Here are some of the most common regrets from home buyers—make sure to consider them before you make similar decisions.
Using all of your savings
It can be tempting to throw all the cash you have into your down payment so that you can have a lower monthly payment. But keep in mind that their are several other costs on the horizon—closing costs, inspection, and more. There will also be surprise repairs, taxes, and home maintenance. It’s a good idea to keep some cash in reserve for hidden or unexpected costs.
Borrowing the full amount offered
Banks will often offer a bigger loan than you can comfortably afford. You may be able to pay the mortgage, but it’ll really tighten your budget. A good rule of thumb is to only take 80% of what’s offered. That’ll give you a lot more flexibility in the long term.
Assuming you’ll like the neighborhood
Your neighborhood is part of the package when you buy a home, so it’s important to learn about the surrounding area. Make an effort to do a little homework on the neighborhood, and the surrounding restaurants, schools, and anything else you deem important. You don’t want to be stuck living in an area you don’t like!
Thinking short term with your loan
An ARM with low introductory rate and mortgage payment can be attractive. It’s easy to think “I’ll be making more money when the rate gets adjusted.” But life can throw you some surprises, and there’s great security in knowing that your payment will be consistent for 15 or 30 years. If possible, go for the fixed-rate mortgage.