Homebuying Mistakes to Avoid

Buying a new home is exciting. Avoid making these mistakes, though, to save yourself a lot of headaches and dollars:

• Buying more home than you can really afford. Determine how much money you spend on food, clothing, transportation, entertainment, insurance, taxes, retirement savings and more to see how much is available for housing. Estimate conservatively, as your income might shrink — or your expenses might grow— over time. Don’t let a lender or real estate agent lead you to buy a more costly home than you should.

• Not checking your credit score and full credit report. Lenders base the interest rates they offer you on your credit score, so it’s worth getting it as high as possible. (Paying bills on time and paying down debt are great ways to boost your score.) Many credit card companies give you access to your score, and you can check your credit reports— which influence that score— at no cost once a year. Visit AnnualCreditReport.com to learn more.

• Not shopping around for a mortgage. Gather quotes from a variety of sources, such as local and national banks, credit unions and perhaps a mortgage broker or two. Even before that, read up on mortgages to learn what kind of loan will serve you best: 30-year versus 15-year, fixedrate versus adjustable, and so on.

• Not getting preapproved. Sellers will take you more seriously if you’ve been preapproved for a loan by a lender. Being a more credible buyer might help if you end up in a bidding war.

• Not using professional help. Find a good real estate agent to work with — one who’s experienced, knows your area and can guide you through the process. If you stumble on a great home on your own, remember that the agent you’ll encounter there is the sellers’ agent, who serves their interests first. A buyer’s agent can protect yours.

Search online for more homebuying tips, and you could save even more money.