If you are looking to buy a home in the Mississauga area, there are many things you need to know. Purchasing real estate is a complicated process, but by avoiding common mistakes, you can have a more rewarding home buying experience.
Mistake #1 – Forgetting About the Additional Costs
Buying a home is not just about paying the mortgage and interest payments each month. There are a lot of other expenses involved in owning a home. Other expenses include property taxes, maintenance costs, utilities, and mortgage insurance. When choosing a budget for your home purchase, you need to keep all of this in mind.
Mistake #2 – Planning to Move in a Few Years
Real estate is a long-term investment. It takes time to build equity in a home. If you expect to only live in your home a few years, it would be better to rent. If you need to move for any reason, it might be at a time when the housing market is in the doldrums. You may have problems selling the house in a timely manner or even renting it out if the market is bad. Meanwhile, you are responsible for paying for two housing costs.
Mistake #3 – Foregoing a Home Inspection
It’s essential to know the condition of any house you are serious about. Knowing about any problems the house will save you a lot of money down the road. Hiring a professional home inspector prevents rude surprises after you move in. A home inspector checks the entire structure of a home including the foundation, floor, walls, ceilings, plumbing, electrical system, windows, and roof. The inspector will make note of any water damage, termite problem, or cracked foundation. If you find any problems, you may to able to get a lower price on the house.
Mistake #4 – Ignoring Your Budget
You created a budget for a reason. It provides guidelines on how much you can afford to spend on a house. Getting pre-approved for a mortgage before you start house hunting is another good idea. You learn how much you can borrow. Most people look at the maximum amount they can spend as the amount they can spend. It’s far more prudent to buy below your budget. That way, once you pay all the monthly expenses, you still have money left over each month. This helps if you lose your job or get laid off.
Mistake #5 – Making a Very Low Down Payment
Although it’s still possible to buy a house with a small down payment or even no money down, it’s a better idea to put as much down as possible. In most cases, you need to put down at least 5 to 10 percent, but if you can manage 15 to 20 percent, this helps you out in a few ways. Paying a higher down payment lowers the amount of money you have to borrow, so your monthly payments will be less. A higher down payment also gives you equity in your home before you even move in. Also, if you put down 20 percent, you won’t have to pay for a Canada Mortgage Housing Corporation (CMHC) loan insurance.
Buying a Home in Mississauga Area
Many people dream of owning a home. However, buying a home takes a detailed look at your current situation and finances, while also avoiding mistakes that can turn buying a home into a nightmare.