Buying a home in Bend Oregon is exciting regardless if you are a first time home buyer or have purchased a home before, there are mistakes that buyers of all ages and experience levels make along the way. Here are 10 of the most common home buying mistakes that some buyers make so you will know to avoid them.
Mistake #1 – Forgetting Homeownership Costs
One of the most common mistakes that many buyers make when they purchase a home in Bend or elsewhere in Central Oregon is not thinking about the basic costs that come with owning a home such as: insurance fees, escrow fees and moving costs.
When buying a home it’s important to budget for at least an additional $3,000 for closing costs and you also need to budget for paying long term home ownership expenses like homeowners insurance and property taxes because these expenses will increase your monthly budget and you should plan for them now before you make your home purchase.
Mistake #2 – Mistaking Low Price for Value
If you’re buying a new or used home you should always examine a home thoroughly before buying it because of price alone. Low price could also mean that the home has structural problems or issues that need to be repaired and the current owner is selling the home for less than market value because they don’t want to make those repairs themselves.
Mistake #3 – Not Checking Your Credit Score
Your credit score can be your biggest asset when buying a home in Central Oregon or across the United States because it will enable you to qualify for a great mortgage loan with a low mortgage interest rate, or if you have a low credit score you will have to pay a higher mortgage interest rate.
Purchase copies of your credit reports at least 6 months in advance so you can have plenty of time to find out what the credit bureaus are reporting about you and if there is any negative or inaccurate information on one or more of your credit reports you will have plenty of time to start the dispute process to have those items removed from your credit reports.
Remember that as important as checking your credit score is it’s also important how you use your credit as well and in the weeks or months leading up to applying for a mortgage loan you should not apply for any new credit accounts because not only will more credit increase your debt-to-income ratio it will also result in a “hard pull” on your credit score when a company reviews your credit report and this can take one point of your credit score.
Mistake #4 – Failing To Get Pre-Approved For a Mortgage Loan
Getting pre-approved for a mortgage loan is an important part of buying a home because pre-approval means that a lender will thoroughly review your finances and credit score then tell you the mortgage loan that you really qualify for versus pre-qualification which involves a lender doing an “overview” of your finances and telling you a ballpark estimate for the mortgage loan that you may qualify for.
To aid your lender during the pre-approval process you should get all of your financial documents ready now including your paycheck stubs, W2’s, bank statements, income tax returns and all financial documentation which shows your proof of income.
For home buyers that are self-employed or in commission only positions you should make sure that you have at least two years of consistent income that can be backed up by documentation.
Mistake #5 – Choosing a Realtor® or Mortgage Lender Blindly
Two of the most important things you must do when buying a home is to choose a Realtor® and mortgage lender because your agent will be responsible for showing you homes which match your search criteria while a lender will help you to get pre-approved for a mortgage loan so you will know the exact loan amount that you qualify for.
Instead of choosing a mortgage lender or Realtor® blindly you should take the time to thoroughly review their references and qualifications online before you decide to work with them and take the time to schedule appointments to meet with both your agent and mortgage lender individually so you can have confidence that they will be the very best people to work with for your needs.
Mistake #6 – Not Researching Neighborhoods or Location
You may have found a great craftsman home in Bend Oregon but is it in a walkable location and close to the shops, stores or restaurants that you may use on a regular basis? You should always think about location when buying a home because location matters, especially if it’s your “forever home” because you may not want to drive everywhere as you grow older and living in a home that’s also close to everything will be more convenient for you.
Mistake #7 – Not Thinking about the Resale Value of Your Home
Another huge mistake that you can make when buying a home is not thinking about resale value because you’re buying a great home that works for your family now but what will the value of the home be in 10 or 20 years down the road when you decide to sell it?
Take the time to research home values in the neighborhood, get to know your future neighbors and once you buy a home in Bend Oregon use care when planning renovations or improvements because some renovations can positively or negatively affect your home’s value in the future and make it difficult to sell.
Mistake #8 – Buying a Home If You Plan On Moving In the Next Five Years
Remember that buying a home should be a long term investment and you must be willing or committed to living there for more than five years because if you plan on moving in the near future because you may be unable to rent or sell your home like you thought you would.
Mistake #9 – Putting Down A Small Down Payment
Even though most Realtors® will tell you that you can buy a home in Bend Oregon with a down payment as little as 3.5% when you are pre-approved for an FHA loan, you should always strive to put down a larger down payment of at least 20% because this will mean that you will have more equity once you move into your house and you will avoid having to pay Private Mortgage Insurance (PMI) that’s required when you put down a smaller down payment.
Mistake #10 – Not Having a Mortgage Repayment Strategy
Remember that having a mortgage is a long term commitment. Be sure to consider how stable you expect your income to be and, if possible, plan to make extra payments during the life of the mortgage to reduce the time it will take to pay it off.