By Robert Stitt
Looking out for the most common mistakes home buyers make can save your wallet whether you are a first-time buyer or looking to add additional properties to your home portfolio.
The greatest temptation in home purchasing is also the greatest danger: paying for more house than you can afford. By saving as much as you can for a down payment and starting off with equity in the home you will already be ahead. Increased equity and a lower loan amount will also decrease your monthly mortgage payment. Pushing the limits on what you can afford is a recipe for disaster.
Not getting an accurate and complete home inspection may save you time on the closing, but it can cost you dearly in the long run. It is wise to choose a home inspector (an engineer is even better) who knows the area and is familiar with the types of problems other homes in the area have faced. A home inspector should look at the foundation, electrical, plumbing, roof, attic, insulation, siding, HVAC, and other dangers such as mold, insects, and asbestos. Referrals can be found at the American Society of Home Inspectors site, www.ashi.com.
Homes need constant maintenance and upkeep. Not budgeting for repair and emergencies can put you behind the proverbial eight ball quickly. Your budget should include a monthly allotment for repair and replacement of windows, insulation, furnace, roof, water faucets and so forth. Hopefully, not everything will go at once, but it is nice to know that you have money put aside when, not if, something breaks or simply wears out.
Remember to plan for emergencies. According to EurWeb, experts recommend that you have six months of living expenses put aside in case you get sick, have an accident, there is a natural disaster, or some other emergency comes along. Hopefully, you will never need your emergency fund, but by keeping money aside in an interest-bearing account you will have peace of mind and be earning interest to boot.
Not keeping up on your insurance can cost you many thousands of dollars in fees. Worse still, you could find that you are not covered if and when you file a claim. Even top-rated companies have variance in prices for the exact same coverages. By shopping around, you could save yourself a lot of money. As your house ages, or you add to your home, you need to make sure your coverage changes to match your needs.
Owning your own home can be a source of great joy and provide a feeling of freedom and accomplishment. By doing your research, carefully planning your finances, and staying on top of the upkeep, it can remain so for many years.