Buying a House: 10 Pricey Mistakes to Avoid

When you're buying a house, a sense of urgency could save you thousands: But it's also important to do research and take the right steps.

Let's review some of the biggest mishaps to avoid when buying a house:

1. Waiting to Get Preapproved
   Ideally, you should get preapproved for a loan as soon as possible. This will not only help you lock in the most favorable rates but also gives you a clear indication of your budget so you can bid on homes fast.
2. Neglecting to Compare Lenders
   Although conditions are favorable for buyers, you still want to look for the best deal. A small difference in loan terms can save you a lot of money. With that in mind, it's crucial to talk to at least three lenders.
3. Failing to Set a Realistic Budget
   When buying a house, your loan amount is only part of what you need to know. You should also write a budget, so you see precisely what mortgage payment will fit your lifestyle. Don't forget to get estimates on utilities for your home and add in the cost of annual maintenance, too.
4. Not Saving Up Beforehand
   Start saving about 12 months in advance to prepare for your down payment. If you have a shorter time horizon, be sure to ask your real estate agent about home loan programs for first-time buyers. These often have low or no down payment.
5. Checking Your Credit Report Too Late
   Your credit score is a guideline lenders use to understand your creditworthiness at a glance. Before you look for a home loan, though, you should also check your credit report for errors and contest any mistakes you find.
6. Not Paying Down Debts
   Besides your raw credit score, lenders also look at your debt-to-income ratio to understand how much you can afford to pay. Paying off credit cards and avoiding new obligations, such as auto loans, keeps your ratio in line.
7. Leaving the Neighborhood for Last
   It's possible to fall in love with a home in a neighborhood that doesn't really serve your needs. Always spend time checking out the neighborhood early on. That should include driving and walking through in the morning, afternoon, and evening, both weekdays and weekends.
8. Not Tapping Your Real Estate Agent
   A good agent is a local expert who can keep you on track in all kinds of ways. One of the most vital: He or she can help you accurately estimate the costs of living in a neighborhood, so you use them in your budget.
9. Being Unclear About Your Goals
   Many loan programs allow you to use gift money from family members, friends, your boss, or even a charity for down payments. If there's a chance someone in your life might want to offer you a gift, loop them into your plans early, so you're all on the same page.
10. Skipping the Home Inspection
    No matter how pressing your timeline is, there's never a good reason to skip a home inspection. The inspection can uncover serious problems that amount to big repair bills in your near future. Getting a thorough inspection is essential for "as-is" homes.

Done right, buying a house can be the best decision you've ever made. Keep these ten pitfalls in mind so you can truly get the best deal on the home you want.

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