7 Biggest Mistakes You Can Make When Buying a Home
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Buying a home can be an exciting but daunting process. Combined with the anticipation that goes into searching for a new home, the rush of a house hunt can cause even level-headed buyers to stray into poor financial decisions or a major lifestyle compromises they later regret. Educate yourself on the pitfalls of home ownership to avoid by reading our list of the 7 biggest mistakes you can make when buying a home.
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Not Getting a Credit Report
Not sure what your credit rating is? Order a credit report and you could prevent a significant drop in your score and a lot of time wasted on wrangling a deal for a house your credit can’t support. When mortgage lenders perform a credit check and find poor credit, this can cause it to fall even further. Being proactive and ordering your own credit report can give you the time to restore your rating before you need to borrow.
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Not Getting Preapproved for a Mortgage
Equally as important as knowing your credit rating is ensuring that you’re preapproved for a mortgage. This is because what you think you can afford and what the bank is willing to lend may very well be two different things. Get preapproved for a mortgage and you’ll have a broad sense of your budget limits while simultaneously warding off the potential heartbreak of putting in an offer on a property you can’t afford.
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While getting preapproved for a mortgage will provide you with a budget ceiling you can’t surpass, it doesn’t mean that you should borrow to that limit. Why? Because it’s possible for a lender to approve a loan that is beyond your means. Carefully calculate your budget, and beware hidden costs—these include property taxes, insurance rates, the price of maintenance and repairs, and utility costs.