We all know that searching for and seeing potential homes is the fun part of the home-buying process. The not-so-fun part? The mortgage.
If you don’t pay attention to the details, your mortgage can end up dragging down the enjoyment of your new home and cause some major regrets. Here are two big mistakes to avoid to ensure that you love your mortgage terms as much as your new home.
1. Don't put off getting a mortgage first
Shopping around for the best mortgage rate should be the first step in the home buying process. Ideally, you should talk to a mortgage broker a few weeks or even months before you plan to buy. It’ll give you time to get your affairs in order to qualify for the best rate and could save you thousands of dollars in the long run. What's more, you won’t feel rushed to accept an unattractive loan because you’re worried you’ll miss out on your dream home.
2. Don’t forget your real budget
There’s often a big difference between what a lender says you can afford and what you can actually afford. Your debt-to-income ratio doesn’t include the money you spend on hobbies, or the cost of commuting to work, or maintenance and utility costs.
Sit down and carefully examine your spending before committing to the loan amount the lender is offering. You won’t enjoy your home nearly as much if it’s eating into your favorite hobbies.