There are common mistakes first-time buyers make. Avoid making critical missteps by being informed and asking the right questions upfront. A large percentage of buying blunders are avoidable. Try to avoid the following mistakes...

Don’t borrow the full amount the bank is willing to lend

Just because you’re approved for it doesn’t mean you should buy the most expensive house you can. As a general rule, take 20% less than the amount the bank is willing to lend. Buying a home below the maximum will safeguard your financial security.

Avoid extra-low, short-term adjustable rate mortgages

Skip the adjustable, creative financing, balloon payments, and teaser loans. No matter what life brings, you will always have your monthly mortgage payment.  A fixed mortgage will remain the same 10 or 15 years from now, regardless of how the market, interest rates, or the economy changes over time. A predictable, constant mortgage will help you determine other financial decisions down the road that creative financing won’t provide.

Save some cash for other home expenses

When buying a home, your cash expenses will amount to more than just your down payment. Remember to factor in other costs associated with purchasing a new home...

• Closing costs
• Appraisal fees
• Broker and loan application fees
• Inspection fees

Keep in mind you’ll have other ongoing costs once you actually move in...

• Property taxes
• Homeowners insurance
• Co-op or HOA fees
• Moving expenses

Don’t be blindsided - prepare for additional costs ahead of time.  

Don’t waste time with foreclosures and short sales

If you’re searching for a steal and you want it in a timely manner, avoid short sales and foreclosures. They generally have higher interest rates and could drag on for months.  Even if the  home is well-priced, you will have to jump through hoops to offset the cash savings.

Know the key to buying smart when it comes to condos

When buying a condo or a home in a community with an HOA, be sure to ask about any future changes that might result in an assessment for all owners. Future improvements, renovations, maintenance or any other financial burdens could result in an assessment leveraged against all condo/homeowners.

Be sure to get the answer in writing from the HOA.  All association meetings must provide notes that can be subpoenaed, so any discussion of assessments, current or future, can be proven.

Talk to the neighbors before you buy

Chat-up your potential neighbors to discover any concerns in the neighborhood, i.e. barking dogs or raucous parties. Being aware and knowing an issue from the start, can save time and unnecessary frustration.

Buying a home will be the most important purchase you will ever make so keep these common mistakes in the forefront of your mind and be smart when the time comes to close on that home.