More lenders than ever before are offering mortgages with as little as three percent down. However, just because you can afford to buy a home does not mean that everything will be perfect. There are some mistakes not to make when beginning your Memphis custom home journey; and these simple tips can save you time, money and heartache.
Be Prepared With the Right Documents
One of the most frustrating parts of buying a home is coming up with the documents your lender will require. You’ll need bank statements, income tax returns and pay stubs to name a few. You’ll also need to prove where your down payment came from; the lender’s concern is you’ve borrowed the money and will have to pay it back. Keep good records before you apply for a mortgage; remember the lender will pick apart your spending and savings history.
Ask the Right Real Estate Questions
You might think you’ve found the perfect home when you step through the door to renovate into your custom home. Keep in mind, homes are “staged” for the purpose of making them more appealing to buyers. While a home may look fantastic, you want to know about more practical issue such as how old the roof is, does the basement have any leaks, how old is the heating and electrical system, etc. While you may fall in love with the “surface” appearance of a home, make sure you have a solid knowledge of the nuts and bolts or you could be facing thousands of dollars in extra costs.
Make Sure You Have a Slush Fund
While you probably took a hard look at your finances and included calculations for homeowner’s insurance, property taxes and mortgage payments in your budget, there’s a good chance you overlooked some other not-so-obvious expenses. Remember, as a renter there are things your landlord typically pays that you may now be responsible for. Water bills, trash removal expenses, landscaping and snow removal and everyday repairs (what happens when your washing machine breaks down!) can set you back financially. New homeowners are often unprepared for those little expenses that can add up very quickly.
Buy a Big Enough House
When you’re looking for a home, it’s important to think about longevity. This means unless you’re planning on the size of your family not changing for many years, you may need to buy a home with extra rooms than what you might need now. Too often, a young family purchases a two-bedroom home only to have more children later making the home unsuitable for their family. This can be a costly mistake, particularly if real estate values have dropped since your purchase.
Neighborhoods: Make a Sufficient Investigation
You think you’ve found the perfect home but you forgot about the neighborhood. How difficult is it going to be to commute to work? How are the schools in the area? How close are you to family members, particularly grandparents? Don’t forget to also take a look at home values in the area; just because a house recently sold for one price does not mean the values in the neighborhood are similar.
Buying a new home is an exciting prospect and you can avoid many of the common mistakes first-time buyers encounter if you take the time to do your homework about the home lending market, ask the right real estate questions and understand that all homes need maintenance. You can save money if you’re handy and capable of doing your own home repairs and have some ability to handle simple do-it-yourself projects.