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Homebuying mistakes of all ages

July 23rd, 2018 12:50 PM by Sam Kader MLO130505

Buying a home is a big financial commitment for most people. It definitely pays to do it right the the first time. Here are some common missteps that homeowners make at every age group and a few tips on how to avoid them.

20's something. Getting the wrong type of mortgage.

People in this age group are just staring their careers and usually have less money and paying less for a mortgage is a necessity. They might get an Adjustable Rate Mortgage (ARM) thinking that they will earn more money down the road so when the ARM rate resets , they will have excess funds for

it. Adjustable Rate Mortgage seems attractive because the initial teaser rate is low compare to Fixed Rate. However, if that promotion or salary increase does not happen and when the ARM resets, there is a chance that the borrower will no longer be able to afford their mortgage payment. Consider other alternatives to ARMs such as Fixed FHA loans, Fixed VA loans and GNND.

30's: Not thinking about the future.

Homebuyers in this age group may not think much about potential future family when buying a condo in a downtown Seattle with gorgeous views of the

Puget Sound. It's important to think that even if you are currently singe that you should ponder these questions:

Who do I imagine living with in the future?
Where do I imagine living?
How do I imagine living?

Those answers should be an integral part of what you look for in a home. For example, even if you think you might want kids or even a dog, you'll probably want to choose a home with a backyard instead of one near a great nightlife.

40's - 50's: Overestimating your budget.

People in these age groups are more financially stable and tend to have more money which can lead to overestimating your budget and buying a house you can't afford. Figuring out our budget is a critical step for buyers of all ages. Your budget should incorporate things that you aren't willing to give up and discretionary spending. Use this online home affordability calculator to determine how much you should spend.

60's and up.

Falling in love with that vacation home. Homeowners in their 60's are retired or getting ready to retire. While some choose to stay put, many plans on moving to warmer climates or even another country.

Before buying a new home in your vacation paradise, be sure to visit the area in every climate. For example, Florida is great in the winter but may not be comfortable in the humid summer months.

Posted in:Underwriting Guidelines, first time home buyers, and tagged: first time home buyers Underwriting Guidelines

Posted by Sam Kader MLO130505 on July 23rd, 2018 12:50 PM

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Homebuying mistakes of all ages

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