According to the U.S. Census Bureau, approximately 1 in 3 Millennials bought a home in 2018; however, 63% of them suffer from buyer’s remorse. If you’re wondering why that is so, read on.
You will agree that buying a home is a huge responsibility and probably one of the biggest investments of your life. Not to forget, the home buying process isn’t as simple as it seems; you need to go through many things, such as searching for a perfect property, hiring the right broker, and most importantly, ensuring that you don’t buy a pit. It’s important to note here that making mistakes in the process is easy, especially when you’re buying a home for the first time. So, if you’re planning to purchase a residential property soon, here are five common mistakes you need to avoid that most Millennials homebuyers make.
1. Not Saving Enough Money
Many Millennial homeowners reported to Porch that one of the common issues they face after buying a home was not having enough money on hand. Besides the down payment and monthly mortgage bill, there are many other things to consider, such as repair and improvements costs. Until you have enough cash to cover all the issues, keep saving.
2. Not Shopping for a Mortgage
Owning a home is an American dream. That is why nothing can feel great than finding a home of your dreams. At times, people think that they can’t afford a mortgage; however, taking a loan is beneficial in several ways. For example, you can enjoy income tax deductions if you have a mortgage. Make sure to find an experienced and reliable lender when shopping for a mortgage.
3. Not Getting Pre-Approved
While searching for home listings online is convenient, it’s best to meet with a lender or loan officer to get pre-approved for your home loan. Showing your financial records, i.e., your credit score, income, assets, and debts will allow them to sign a pre-approval letter to determine the amount you would qualify for. Don’t forget that these letters will show you as a serious buyer in the eyes of the seller. Moreover, real estate agents often look out for pre-approvals to find you a perfect home within your budget.
4. Not Factoring in Taxes
Besides closing costs and mortgage payment, you will also need to pay taxes. While many homebuyers already know that, they often fail to realize how steadily taxes can go up. Well, this happens when the city or county increases property taxes in the neighborhood you have bought a house in. Also, the market price of real estate can be reassessed at a higher value, mostly through upgrades and additions made by a property owner. Consequently, such improvements can increase your tax burden.
5. Buying at the Wrong Time
Well, it’s critical not to commit too quickly; most real estate agents advise Millennials to make a home purchase when fewer people are buying. Note that, the buyer pool is often smaller during January and July when many people go on vacation.