According to the National Association of Realtors, over 5 million homes were purchased in 2019 alone. Every day, thousands of people all over the country are finding their dream homes and taking the plunge into the new chapter of their lives.

Purchasing a home is very exciting, but there are a few home-buying mistakes that, when made, can completely ruin the experience. Some of them can even put you in danger of losing your new home soon after you buy it.

To learn everything you need to know about these mistakes and what you can do to avoid them, just keep reading!

1. Overestimating Your Budget

One of the most common home-buying mistakes is overestimating your budget. Before you ever explore neighborhoods or open a listing website, you need to determine how much house you can afford.

The price of the home is only part of the cost. You’ll need to take insurance, HOA fees, monthly utilities, additional bills, and taxes.

2. Not Shopping Around for a Mortgage

When it’s time to choose a mortgage, it’s always a good idea to compare offers. You never know what other companies offer if you don’t do the research!

Mortgage lending companies can differ in closing costs and interest rates, and some even offer discount points. Don’t worry, all mortgage applications made within 45 days of each other only count as one credit inquiry.

If you’re buying real estate with your IRA, there are certain restrictions and rules you have to abide by. Ensure that you know exactly what you’re getting into before you begin.

3. Not Saving for a Down Payment

The recommended amount for a down payment is 20%. And while it can be beneficial to pay this much upfront, you don’t have to.

That being said, do your best to put down as much as you can afford. Some mortgage lenders will offer 3.5% or even 0%, but you might come to regret this if you do it. The more you put down in the initial purchase, the lower your monthly payments will be.

4. Sacrificing Your Savings

The main thing to remember about that last point is to spend what you can afford. Don’t empty your entire savings account for a down payment. It might take you a few years to save the amount you need on top of your existing savings, but it’s better than spending every penny you have.

You never know when an emergency is going to arise. Not to mention, you’re likely to encounter a repair expense within the first year or two of purchasing your home, which brings us to the next point.

5. Overlooking Repair Costs

Always be realistic about the repair and renovations costs your chosen home is going to require. It’s easy to look at a home with rose-colored glasses, overlooking the need for major repairs such as a roof or HVAC unit replacement.

One of the benefits of inspections is that you’ll get an estimate for these types of repairs if they’re needed. But even still, you should assume these estimates are low.

Avoid These Home-Buying Mistakes to Save Yourself from Financial Trouble

When shopping for a home, you need to take things like size and location into account. However, the most common home-buying mistakes aren’t with location or aesthetics, but with the cost.

Remember, your home is one of, if not the largest investment you’ll make in your life. Make the investment wisely!

Looking for more tips and tricks for house shopping like a pro? Check out our blog!