Let’s face it, we all make mistakes! That’s a reality and that’s how we learn in many cases. When it comes to real estate, buying a home for the first time can be one of the most exciting, intimidating and overwhelming experiences for many buyers. In this blog, we listed some of the common mistakes most home buyers make in all age groups:
Younger buyers may want to consider a lower down payment loan – like an FHA loan or low-down payment conventional loan – to reduce their initial out-of-pocket expense while locking in an interest rate. Some young buyers get ARM’s, which are adjustable rate mortgages since they have a low introductory interest rate. An adjustable-rate mortgage (ARM) is a type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan. Normally, the initial interest rate is fixed for a period of time, after which it resets periodically, often every year or even monthly. The thinking is that they will earn more money in the future, so when the rate increases, they will be able to afford the new monthly payment. However, ARM’s carry a lot of risks and even though interest rates have been at historic lows for years, they are starting to creep back up. What happens in rates increase, but your home value falls? This is where they realize the mistake!
When home shopping, you must consider whether or not you plan to start a family in the future. Even single people should keep this in mind as life can change quickly. A sleek, modern 1-bedroom condo may make a great home for a single person, but in a few years, it may not make any sense at all. Think long term when buying a home.
Figuring out your budget is a key step for buyers of all ages, but especially those in this age group. Buyers in their 40’s and 50’s tend to have more money saved, which can lead to overestimating their budget. They can easily end up buying a house that they really cannot afford once monthly payments were being considered of which they typically last 30 years.
Your vacation home can be your full-time home, but just be sure to factor in all of the costs, before making the move. Once you get into your 60’s and above, retirement is here or coming soon. Many retirees go on vacation, fall in love with a place, and make plans to move. Relocating and buying a home is an expensive process, so be sure to familiarize yourself with the new place before buying, so you won’t fall into the same mistakes most home buyers make if you fall into this age group.