Buying one of the new homes in Little Elm TX may be one of the biggest financial decisions you’ll make. Because of that, there’s plenty of room for error. You could wind up paying thousands of dollars more for a home by making even a small mistake during the buying process. In order to get the most out of your investment, here are three of the biggest errors you need to avoid making before you purchase a new home.
- Budgeting the Wrong Way
Budgeting may be the most important step in the home buying process. Knowing how much you’re willing and able to spend on your new home protects you from unwanted issues that result from committing to a home you can’t really afford.
Some home buyers aren’t upfront with their real estate agents and understate their budget for a new home. As a result, they may miss out on the opportunity to find the house they want. Knowing your true budget, and being honest about it with your agent, allows you to make the right financial decisions while securing a great home.
Your budget should include all of the costs related to your home purchase. Some buyers leave out closing costs, only to end up having to pay more than they expected. As a general rule, you can plan on closing costs totaling 2 percent to 17 percent of the home’s purchase price.
It’s best to talk with a professional who can estimate your closing costs so that you create an accurate budget.
- Not Getting Pre-Approved
Failing to get pre-approved for a new home is a common mistake that causes a wide range of issues for home buyers. There’s often a big difference between what buyers believe is the right purchase price and what they can actually secure from their lender.
Getting pre-approved gives you additional security and peace of mind as you move forward in the home buying process. It’s even more important for buyers who have issues related to their credit scores or income history.
Knowing how much you can obtain from a lender allows you to make the right offer when you find a home you want. It prevents unwanted surprises that can derail your home purchase.
- Creating More Debt before Buying Your New Home
Your debt-to-income ratio plays a big part in your ability to buy the home you want. Creating more debt before you purchase a new home is a big mistake that can negatively impact any offers you make.
This can occur even after your offer has been accepted, as underwriters must review your credit history before approving your loan. Any changes in your history related to new debts can prevent you from obtaining a mortgage.
New debt from credit cards, automobile purchases, and others should be avoided. A lower credit score can lead to a higher interest rate on your loan or the inability to have your mortgage approved.
Landon Homes can help buyers make the right decisions when looking for new homes in Little Elm TX. We’ve partnered with Supreme Lending to make securing financing for your new home easy.
Contact Landon Homes today to learn how to get the most out of your new home purchase while designing and building the perfect home for you and your family.