Buying a home is so exciting! So much happens between signing the contract and closing on the home. Often times, the excitement causes you to overlook issues that should be home buying deal breakers. Let’s explore some things that should throw up red flags and stop you in your tracks…
- When your lender has to get “creative” to approve you for a loan, you probably need to reconsider the purchase. The last thing you want is to get into a loan you can’t really afford. Having to take out adjustable rate mortgages or piggy back loans may not be the best idea for your budget. You need to understand all terms of the loan before signing any papers. Lenders want to make your dreams come true, but you are the one stuck with the payments. Know what you can afford. Don’t depend on someone else to tell you. The best advice is to be pre-approved for your loan before you go house hunting. This will keep you looking in your price range rather than falling in love with a home beyond what you can afford.
- If your home inspection shows major issues, it’s a good idea to walk away from that deal and keep shopping. All inspections will find some issues, but usually they are minor and easy to repair. However, if your inspector finds things like insect infestation or water damage, you could be looking at tens of thousands of dollars worth of repairs and maintenance. Having just forked over a big chunk of change for the down payment, you probably won’t have the funds left for the repairs. Don’t let your love for the home blind you to the reality of the problem.
- Driving through the neighborhood should leave you feeling comfortable, safe and protected. If the area around your future home leaves you with any uneasy feelings, you may want to rethink signing those papers at closing. Make sure you do your research on the area. If the area is declining, the home will depreciate in value. Real estate is an investment you can expect to make money on as long as you invest wisely. Look for the up and coming neighborhoods with good schools. If you are unsure, your real estate agent is a great resource. (Read more about neighborhoods here…)
- If your appraisal comes in lower than the agreed upon contract price, it may be a sign to walk away from the deal. Some real estate markets are rising so fast that the comps aren’t keeping up which could result in a low appraisal. While the home may be worth more, the lender can’t let you borrow more than what the appraisal shows. You have a few options such as arguing the low appraisal, negotiating the purchase price with the seller, or paying cash for the difference. Just be careful if you choose to pay the difference out of your pocket. Don’t let your love for the home blind you to the effects on your bank account. You need to make sure you have enough left for all of the expenses that come with a new home. The last thing you want to do is get behind on your first mortgage payment.
Having a professional real estate agent on your side is crucial when issues like these arise. The Selling Rocky Mountain Homes Team has several trained and experienced agents that are ready to assist you through your home buying process. Our commitment is to make sure our clients are well informed and satisfied. Call us today @ 720-593-2014 so we can help you get started making your real estate dreams come true! We are waiting to hear from you!