Thursday, April 22, 2010

6 Biggest Mistakes Homebuyers Make

According to, these are the 6 biggest mistakes homebuyers make.
1. Not knowing your credit score - it's important to monitor your credit report yearly to prevent identity theft. With common names such as John or Susan Smith it's possible for credit bureaus to report incorrect information on your credit report. For a free credit report click here.

2. Buying a car before a house - as a loan processor, I frequently had to tell clients that previously qualified for a loan that they no longer qualified. Why? Because the borrower decided to buy a new car or go on a shopping spree. If you are serious about buying a home DON'T open new accounts that will drop your credit score and/or impact your debt-to-income ratio.

3. Skimping on home inspection - new homebuyers that chose not to do a home inspection prior to purchasing their new home might end up paying more later because they were unaware that the property needed a new roof or that there is a problem with the foundation.

4. No lawyer - Realtors® are not allowed to give legal advice; however, if you are uncertain about any aspect of your purchase contract, you may want to consider contacting a real estate attorney for further advice.

5. No contingencies - as a buyer you do not want to lose your earnest money deposit because you did not have any contingencies on the purchase contract. In today's market some properties will not appraise for what seller's think or there might be a problem with the home inspection.

6. Not budgeting for insurance - another common issue I noticed as a loan processor is buyers calculating there PITI. Principal, interest, taxes, & INSURANCE. Many first-time homebuyers that I dealt with did not realize how much insurance on a home would cost them and how that amount is aside from principal, interest and property taxes.

To read the full article click here.

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