Spring is here, which means some people are gearing up to make what could be the largest purchase of their lifetime: a home.
In many parts of the country, would-be buyers are finding that there aren’t enough homes on the market. That could lead them to move more quickly than they would like to increase their chances of getting the home they like, says Tim Manni, a mortgage expert for NerdWallet, a personal-finance site. The home-buying process can have many moving parts, and even people who aren’t rushing the process can make mistakes.
In fact, nearly half of homeowners said they wish they had done something differently, according to a survey of more than 1,400 homeowners released by NerdWallet this year.
So before you take the jump, here are some things that others have said they regretted after making their purchase, based on surveys and discussions with industry experts. Keep these in mind as you look for your new home.
Some people buying homes in tight markets may try to beat competing offers by not requiring a home inspection, says Daisy Kong, a spokeswoman for Trulia. But that means they may not discover problems with the home until after the sale is complete, she says. Home buyers who overlook these issues before signing on the dotted line could get stuck making expensive repairs and renovations they weren’t prepared for.
Other times, home buyers may forget to research factors that are important to them, such as the quality of the schools in the neighborhood, Kong says. Or they may not learn until after they’ve bought the house that a crime was committed on the property, she says. Home buyers can avoid these surprises by making a list of the factors that are most important to them and asking about those things ahead of time, Kong says.
The findings suggest that some people are not doing enough research about mortgages, fees and other costs they may face when buying a home, Manni says. Some people may underestimate how much they should save to cover closing costs and other expenses, he says. Buyers who don’t research their credit histories may miss a “black mark” on their credit reports that can lead to a higher mortgage rate, he says. Other people may forget to compare mortgage lenders, which could cause them to miss out on a better rate.
Having a down payment of at least 20 percent can give you a better chance of snatching a home in a hot housing market, Staley says. The size of the down payment can also affect your interest rate and your monthly payment, Manni says. (Generally speaking, the larger the down payment, the lower the interest rate and monthly payment.)
Potential buyers should use online calculators to estimate what their monthly payments may be, depending on the size of their down payment and other factors, Staley says. Families should also remember to consider other expenses they may face soon, she says. For example, young couples who want to have children should budget for some of the expenses that may come up later, such as child-care costs, Staley says.
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