Buyers face challenges in any market – and today’s is no different. With higher mortgage rates and rising prices, plus the limited supply of homes for sale, there’s a lot to consider.

But, there’s one way to avoid getting tripped up – and that’s leaning on a real estate agent for the best possible advice. An expert’s insights will help you avoid some of the most common mistakes homebuyers are making right now.

Putting Off Pre-approval

As part of the homebuying process, a lender will look at your finances to figure out what they’re willing to loan you for your mortgage. This gives you a good idea of what you can borrow so you can really wrap your head around the financial side of things before you start looking at homes. While house hunting can be a lot more fun than talking about finances, you don’t want to do this out of order. Make sure you get your pre-approval first.

As CNET explains:

“If you wait to get preapproved until the last minute, you might be scrambling to contact a lender and miss the opportunity to put a bid on a home.”

Holding Out for Perfection

While you may have a long list of must-haves and nice-to-haves, you need to be realistic about your home search. Even though your ideal state is you find a home that checks every box, you may need to be willing to compromise – especially since inventory is still low. Plus, a home that has everything you want may be too pricey. As Investopedia puts it:

“When you expect to find the perfect home, you could prolong the homebuying process by holding out for something better. Or you could end up paying more for a home just because it meets all your needs.”

Instead, look for something that has most of your must-haves and good bones where you can add anything else you may need down the line.

Buying More House Than You Can Afford

With today’s mortgage rates and home prices, there’s no arguing it’s expensive to buy a home. And while it may be tempting to stretch your finances a bit further than you’re comfortable with to make sure you get the house, you want to avoid overextending your budget. Make sure you talk to me about how changing mortgage rates impact your monthly payment. Bankrate offers this advice:

“Focus on what monthly payment you can afford rather than fixating on the maximum loan amount you qualify for. Just because you can qualify for a $300,000 loan doesn’t mean you can comfortably handle the monthly payments that come with it along with your other financial obligations. Every borrower’s case is different, so factor in your whole financial profile when determining how much house you can afford.”

Not Working with your Local Real Estate Agent

This last one may be the most important of all. Buying a home is a process that involves a lot of steps, paperwork, negotiation, and more. Rather than take all of this on yourself, it’s a good idea to have a pro working with you. I can help reduce your stress and help the process go smoothly.

As CNET explains:

“Attempting to buy a home without a real estate agent makes the process more arduous than it needs to be. I will give you professional legal guidance, market expertise and support, which will save you time, money and stress. They can also increase your chances of finding the right home so you don’t have to spend hours scouring the internet for listings.”

Bottom Line

Mistakes can cost you time, frustration, and money. If you want to buy a home in today’s market, connect with me so you have a pro on your side who can help you avoid these missteps.

Using a reverse mortgage to purchase a new home is possible, but there are several important factors to consider:

1. Eligibility: You must be at least 62 years old and own a significant amount of equity in your current home to qualify for a reverse mortgage.
2. Loan Amount: The amount you can borrow through a reverse mortgage is based on factors like your age, the appraised value of the new home, current interest rates, and the loan limit set by the Federal Housing Administration (FHA).
3. Down Payment: Typically, you’ll need to make a down payment from the sale proceeds of your current home or from other assets to cover the difference between the reverse mortgage loan amount and the purchase price of the new home.
4. Loan Repayment: With a reverse mortgage, you don’t make monthly mortgage payments. Instead, the loan balance grows over time with interest. The loan is typically repaid when you sell the home, move out permanently, or pass away.
5. Financial Responsibilities: You are still responsible for property taxes, homeowners insurance, and maintenance costs for the new home. Failure to meet these obligations could lead to foreclosure.
6. Loan Costs: Reverse mortgages often have higher fees and closing costs compared to traditional mortgages. It’s essential to understand these costs and how they will affect your finances.
7. Impact on Heirs: Using a reverse mortgage to purchase a new home can reduce the equity available to your heirs unless they choose to repay the loan and keep the property.

Before proceeding with a reverse mortgage to buy a new home, it’s crucial to consult with a financial advisor or a HUD-approved housing counselor to understand the implications, costs, and alternatives available to you.