Home Buying Mistakes To Avoid

With the upcoming mortgage rate hikes less than a month away

, many Canadians are still trying to cash in on the current rates before that inevitable increase in June. That means, many Canadian are looking to buy a home. If you happen to be one of them, you may want to consider avoiding a few of these purchasing blunders before making your way out the door.

A very common mistake consumers make is buying a large ticket item on credit before they buy their house. If, for example, you have bought a car before a house, the amount of your car loan will seriously decrease the amount of your available credit limit. It may also have an affect on your credit score so it's advisable to not open any new accounts, including any credit cards, while your mortgage application is in progress.

Not knowing your credit score is a serious fault if you're considering a home purchase. It is imperative that you know exactly what your credit score is and it's just as important to go over your credit record and make certain that everything listed is accurate. If not, it will be necessary to correct any of the errors being as the interest rate the bank will offer you will be directly reflected from your credit history. The lower your score, the higher your cost of borrowing.

The American Society of Home Inspectors is reminding buyers that many of the homes currently on the market are distressed properties in that they are short sales and foreclosures; so paying for a good home inspection is vital. The last thing a new homeowner wants are massive home repair bills. With many of these current listed homes, their previous owners usually did not have the money for house maintenance and upkeep, so there is a lot of deferred maintenance to be aware of. Problems such as plumbing, electrical, insulation, heating, mold, roof and foundation issues are only some of the problems a potential owner should have their home inspector look for.

Hiring a lawyer is one of the best ways to ensure you do not make a bad purchase as nearly everyone else involved in the sale of the property gets paid only after the property is sold, therefore, they may not necessarily do what's best for the buyer. It's also standard practice to put up between 1% and 3% 'in earnest' money in the event the buyer decides to back out of the deal. An inexperienced buyer may sign a contract without including common contingencies such as failing to qualify for the mortgage or major home inspection problems. It's also very important to remember to budget for home insurance. Despite having insurance for such things as theft and fire, if your new home is in a known flood zone, that will significantly increase the cost of your homeowner's insurance.

Diligence and thorough research are the difference between buying a house that will become your dream home and buying one that will be a nightmare. Take the time to be sure you have all the facts before jumping at any purchase. You'll be glad that you did.

by: Molly Wider

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