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7 Costly Mistakes That Home Buyers Make (And How To Avoid Them)

When it comes to significant purchases in your life, very few of them are more costly or important than buying a house — in fact, for most people, buying a home is the single most expensive purchase that they’ll ever make in their life. Though it generally takes most homeowners a minimum of decades to pay off such an investment, it’s always worth it: after all, a house is so much more than just a physical structure to shelter you from the elements. It’s your home; a place that you can truly call your own and feel comfortable residing in.

Perhaps you’re a first-time home buyer and after an extensive rental history, you’ve finally decided to settle down somewhere and start a family with your significant other. Maybe you’re a single person with a good income looking to invest and own property for the purposes of renting it out to tenants in the future. Whatever your purchase motivations are, one thing remains the same: buying a home is a big deal.

Our Community Bank Can Help Finance Your Investment

Celebrating 20 years as your preferred community Bank, NebraskaLand is proud to have developed relationships with locals in North Platte and Kearney. Going beyond a first-name basis between our team and the community, we’re honored to help finance some of the most important things in your life — including buying a house!

Giving Back To North Platte And Kearney

When our valued customers deposit funds in our Bank, you’re contributing to a positive chain reaction. How so? Well, not only does NebraskaLand National Bank offer extremely competitive deposit rates (among the highest in the region), but our community Bank is also proud to invest in local businesses here in North Platte and Kearney. Additionally, we return a portion of our earnings back into the communities that we serve. This can be seen in the form of sponsorships, grants, and gifts. To us, if we’re not involved in our local community, then we’re not a true community bank. It’s that simple.

Helping You Buy Your Home

So, you’re probably here wondering what to do — and what not to do — in regard to buying a home. Below, you’ll find seven common and costly mistakes that home buyers tend to make when locking down on this major asset. Read below to learn more, and as always, feel free to get in touch with our community bankers today with any questions about how we can help you navigate our mortgage lending services.

Mistake #1: Ignoring Your Credit Score And Credit Report

Don’t leave these important numbers in the dust! Shopping for the right home without looking into your financial situation is like going clothes shopping without trying anything on, let alone looking at the price tag. Before you seriously consider any homes, or even go house hunting, for that matter, make sure that you obtain a copy of your credit report and an updated FICO score from a reputable source. When your credit report is clean and you have a high-ranking credit score, you’re more likely to be preapproved for a mortgage loan at a relatively low interest rate.

Mistake #2: Not Getting Preapproved For a Mortgage Loan

Speaking of preapproval, it’s imperative to know exactly how much you can afford to borrow. One of our qualified mortgage lenders can help you understand these numbers. Especially important for first time home buyers, you’ll want to discuss these financials well before you’ve set your heart on a particular house. Typically, pre-approval involves getting a credit check and giving a copy of your W-2, pay stubs, and relevant bank and brokerage statements to the mortgage lending expert that you’re working with. Though this process may sound tedious, it’ll end up saving you time by only looking for homes that you know you can afford.

Mistake #3: A Lack Of Neighborhood Research

By purchasing a home, you’re committing to living in that particular area for at least a few years if you decide to sell — but, realistically, you’ll be in that spot for much longer. It only makes sense, then, to give the area a good amount of research to make sure that you’ll like where you’re living. Do you need close proximity to a great elementary school or preschool if you have young kids? Do you value being in walking distance to shops and restaurants, or would you prefer the quiet bliss of suburbia? Though a good real estate agent can help with these matters, it is the responsibility of the buyer to research local crime reports, school options, churches, shopping districts, and so forth.

Mistake #4: Glossing Over The Hidden Costs

If someone has told you “things are generally more expensive than they seem,” then they’re absolutely correct. When it comes to buying a home, this is even truer. Sure, you may have already factored in the purchase price of the home itself, but have you considered additional hidden costs like taxes, insurance, utilities, and other fees? These numbers add up, and they’re not cheap. These “other fees” typically include things like appraisal fees, escrow fees, homeowners insurance fees, property taxes, and moving costs. When thinking about the affordability and budget, include every possible cost in addition to the actual purchase price of the home.

Mistake #5: Failing To Make A Long-Term Budget

This mistake carefully ties in with glossing over the hidden costs of purchasing a house. Making a long-term budget not only ensures that you can afford your monthly mortgage payment for years to come — as well as plethora of hidden costs that we touched on above — but it also helps you determine what you can afford. With long-term budgeting, you’ll want to allocate no more than about a third of your monthly household income to housing costs. Again, these housing costs include more than just your mortgage principal. You’ll also be paying things like interest, taxes, and homeowners insurance. Naturally, our friendly community Bank representatives can help you with budgeting matters.

Mistake #6: “Mentally Decorating” Before Getting Your Home Inspected

If you’re imagining the ideal curtains for your living room that perfectly match the color of the walls well before your home has been properly inspected, then you’re moving a little too fast. Checking the safety of your new (or new-to-you) home is a much higher priority than interior decorating. When your home is inspected, anticipate a thorough evaluation of the home’s structure, the construction itself, and mechanical systems like heating and cooling. If there are any repairs that are needed, you’ll want to make sure those are financially accounted for prior to any expensive furniture or interior decorating purchases.

Mistake #7: Working With The Wrong Real Estate Agent (And Lender)

This is perhaps the greatest mistake that a home buyer could make — or, at least, the greatest mistake out of this list. All too often, home buyers will work with a real estate agent that they’re not very comfortable with. Researching realtors in your area via the National Association of Exclusive Buyer agents (a nonprofit that represents you, the buyer) is a good place to start. You can also ask friends, neighbors, relatives, and coworkers for recommendations on who to work with. Ideally, you should have complete confidence and feel comfortable with your realtor and your mortgage lender. That’s why we encourage home buyers like you to get to know our lenders!

Work With NebraskaLand National Bank Today!

As we mentioned above, our community Bank doesn’t just handle people’s money. Going beyond what a traditional bank does, we’re invested in the lives and wellbeing of people in the communities of North Platte and Kearney. To get started, stop by one of our convenient branches or feel free to contact NebraskaLand National Bank directly to learn more. We’re excited to help you get the right house that you deserve!

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