5 Financial Mistakes People Make When They Buy A Home

5 Financial Mistakes People Make When They Buy A Home

Whether you a buying a home for the first time or have had years of practice it can be very overwhelming and stressful. Not only are you taking a large financial risk you are making a move into a new home where you and your family will hopefully spend many years in. When you decide to purchase a home you want to cut down the number of all possible risks. Knowing what some of these risks are can help you steer clear of them. Here are 5 common mistakes people make when they buy a home.

1. Exceeding Budget

The first thing that needs to be done when buying real estate is figuring out your budget. This can be a lengthy process that may give you an outcome you’re not exactly excited about. If your budget is lower than anticipated then maybe now is not the right time to buy. If you do find that you can purchase something that fits all of your needs within your budget then go for it. No matter what you do, do not go over that initial budget. Even if you think you can cut back in order to make that larger mortgage it is not a guarantee and you could likely find yourself struggling worse than expect for the next several months or years.

2. Paying Bills Late Or Simply Not Paying At All

Not paying the bills for your home should never be an option. Getting yourself further and further off track is just going to make it harder and harder to get back on. There should never be an excuse for not paying a bill. In order to not forget try and pay bills on the same day each month or set reminders for yourself. If you are a little short on funds this month just call and talk to your lender as they might be able to work something out for the time being. Not paying bills will lead to late fees, higher interest rates, or can even affect your credit score.

3. Counting On A Big Windfall

People play the lottery with the glimmer of hope in their eyes. But as we all know the lottery is not even close to a sure thing. When purchasing a home you cannot rely on a large sum of money you think is going to come your way. You need to be realistic with your current financial situation and buy within your means.

4. Out Of Control Credit Card Use

It can become very easy to rely on the ole credit card when cash is low. Next thing you know you have 10 active cards and the bills are piling up around you. When going into the home purchasing process you do not want to have all of this debt around you. Make sure all of your financial loose ends are tied up before making a large purchase such as a home.

5. No Plan For The Future

People say “oh that will never happen to us”. Well guess what, it just might! Having a plan for the future is crucial when becoming a home owner. You need to set aside money to help pay the bills in case something happens down the road. The last thing you will want during difficult times is to lose the place you call home.

Jackson Cooper works in the Park City real estate market and has helped hundreds of people work through the process to home ownership. 

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4 Responses to 5 Financial Mistakes People Make When They Buy A Home

  1. Many people don’t realize how expensive homes can be. Don’t just think about the actual house cost. There are property taxes, home insurance costs and other things to think about!

    • So true! That’s one of the general stumbling blocks I run into sometimes. I’m expecting money from a gig, but it’s slow in coming — or I’m stiffed altogether. Making any plans based on money you don’t have in hand can be disastrous.

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