With rising inventories and plans to raise mortgage rates in 2014, home buyers have more than enough incentive to find a home in Anchorage now, rather than later. However, as you begin your search for your next dream home, there a number of common mistakes we’ve noticed among buyers — that usually result in headaches and lost money. Here are some tips to avoid the most common home buying mistakes this year:
1. Reconsider the Upgrades and Buying Brand New Items
When moving into a new house, many families want to have brand-new things for their new home. Typically, they go out and buy new furniture and fixtures. If this is done too quickly, the family will end up in debt. The best solution is to live in the house for a while before purchasing anything. Getting a mortgage and excessive credit card debt can be harmful for the family.
2. Think Each Move Through
Young families or individuals often move for a new job or better life. If a relocation is going to take place frequently, they should reconsider buying a house. Selling a different property every other year can be expensive and stressful. In addition, many parts of the country do not have a strong enough rental market to rent out the house. For buyers, homes should only be purchased if they plan on living there for a while or if the family can easily rent out the property.
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3. Factor in Additional Costs
The mortgage payment is a major cost in home ownership, but it is not the only one. There are other expenses like property tax and utilities that will eat into the monthly budget. Before purchasing the property, the homeowner needs to look at similar homes in the area and see what they pay for property taxes or utilities. In addition, homeowners’ insurance and yearly maintenance costs can eat into a family’s budget. Homeowners should also watch out for closing costs and the cost of home inspections. Factor all these things into your budget before buying a new home in Anchorage.
4. Keep to a Budget
Many homeowners fall in love with houses that go above their budget. To avoid falling prey to a home that you cannot afford, you should get pre-approved for a mortgage first. A lender will help you get a gauge on how much home you can really afford and what the typical mortgage payment will be. Instead of buying a home that is above your budget, aim to go a little below it. That way, you have extra money you can save up each month.
5. How Much Money to Put Down
Individuals who have a high credit rating may be able to get a mortgage with a down payment of just three percent. Even though this is possible, they may want to wait until they have saved more money. A low down payment means that the homeowner will not have enough equity in the property. If they have to sell the house, the homeowner will barely cover their closing costs. Ideally, homeowners should save more money before they buy a home, so that they will save on interest rates and protect their investment.
Buying a Home in Anchorage, AK
Although there are many mistakes to avoid when buying a property, these are some of the most common ones. To stay ahead of the game, homeowners in Anchorage, AK should stay proactive and be prudent in their investment decisions.