3 Dangerous House Hunting Mistakes to Avoid
House hunting is an exciting task. You go for a host of house tours and the possibility of finding the perfect house keeps you motivated. Nevertheless, some grave mistakes can make house hunting sour. You may end up buying a house, which is not meant for you. Refrain from committing these 3 mistakes and save yourself the disappointment:
You Mentally Start Living in The House You Have Not Yet Bought
During house hunting, you may stumble upon a house that is just what you are looking for. With perfectly sized rooms, a beautiful porch, and spacious kitchen, the house envelops your mind. You start imagining living in it already. The reality hits you hard when your realtor mentions the price tag. You can avoid such heartbreaks by touring houses that are at the lowest range of your budget. With affordability guaranteed, it would not hurt you if you fell in love with the house.
You Become Desperate
No one knows how much time you need to spend before you find an affordable house. In case the house hunting is not yielding any positive results, you should drop it for the time being. Let a few months pass and then, begin the search again. If you buy a house just because you did not find anything better, your heart will not be in it, and you may have to consider moving again.
You Think You Can Fix Even The Major Flaws
Your family may appreciate your handyman skills when you fix a faucet or a table. However, you should not overestimate your abilities because you may have to pay dearly for it. Do not agree to purchase a house that requires major mending work. If the flaw is related to the main structure of the house, know not only you will require skills of a professional but also you will need to spend considerably for getting materials for repair.
What Should Consider Before Opt Refinancing?
Refinancing your mortgage is a good idea, as it allows you to pay lower monthly payments. However, before you opt for it, you need to take into consideration a few points:
How Much is Your Home Equity?
Equity is the difference between amounts that you still owe to the mortgage company and the current value of your home. If your percentage of equity is low then you may not qualify for refinancing. Low equity means you owe your lender more than what the present value of your home is. In such a situation, a lender may not let you refinance, as it could spell a loss for him. Nevertheless, if you still wish to go for refinancing, you should openly discuss it with your lender so that there could be a way out.
What is Your Credit Score?
Your credit score will play a crucial role in this regard. If you have been able to improve your score by making timely payments then your lender may become ready to refinance. Since your credit score has become high, you will qualify for a loan at a lower interest. Hence, refinancing is a brilliant idea in this case. On the other hand, if your credit score has not improved or has dipped further, you may have to pay higher interest if you refinance your loan.
How Much Will Be Your Refinancing Costs?
Refinancing of a home loan can cost anywhere from 3% to 5% of what you have borrowed. But there are ways of bringing down the cost. Discuss with your lender if the cost can be included in the refinanced loan; it will increase its principal. You may also ask your lender to divide the cost and add to the interest amounts. Once the interest covers the cost, it will come down to what it was originally. Do not hesitate to negotiate to refinance cost with your lender, as it is always possible for him to pay some part of the cost by himself.