Home buying, like any process, comes with its own pitfalls. Unlike some other purchases, making a mistake can cost you thousands in the long run. To avoid making such an error, today I’ll discuss three things to avoid when buying a home.
Don’t Purchase Based on Projected Income
The future is unpredictable. It is good to be optimistic, but you must also remain practical. When buying a home, you should consider the purchase price based on the income you earn now, not what you think you’ll make.
Some of you may find this an obvious statement, but you’d be surprised. There are those that throw caution to the wind when home buying, and reach farther than their grasp. This brings me to our second error to avoid.
This is similar to my first point. When buying a new home, people want the world. They want to have their dream home in a dream location. Unfortunately for some, this costs too much.
There is danger in overspending, because you may be obligating yourself to more than you can afford. That can make you end up in financial instability in the future. To avoid this, simply purchase what you’re able to obtain. It may lack certain features that you’d like, but it will help balance your checkbook every month.
Don’t Forget to Protect Yourself
The last thing to never forget is to protect yourself. You’ll want to think about things like closing costs, property taxes and contingencies. These are vital for your own protection.
Closing costs can add up and greatly impact your budget. Always account for them. Additionally, always consider the price of annual property taxes. This can cost you tens of thousands of dollars annually, which will drastically impact your monthly obligation.
Finally, consider all the contingencies that can protect you during the home buying process. Sometimes, a house may not be what it appears. During the home inspection process, there may be some fixes that need to be made. Account for these before you sign, to know you are getting something stable and not something that will cost more in the long run.
If you are looking for a home in the Encinitas California area, I’d be happy to help you along the home buying process. Get in touch by phone or by writing an email. We can discuss the type of home you desire and create an action plan towards obtaining it. I look forward to hearing from you.