Five Tips for Beating Buyers Remorse

Five Tips for Beating Buyers Remorse

Buying a home is a great experience, but it can be an overwhelming experience. As a result, some home buyers have a sense of buyer's remorse for a little while after the purchase.

With the first time homebuyer’s tax credit ending last week, loan applications for mortgages were up by nearly 10 percent over the last couple months. This shows that home buyers were hoping to hurry and beat the deadline so they could take advantage of the credit as well as the low mortgage rates by purchasing a new home. But did some of the buyers rush into something that they did not really want? Are they going to look at their new home and wonder what they got themselves into simply because they rushed to make it happen? If this sounds like you either today or in a few months, here are some tips to help you beat buyer’s remorse.

1. Make your home your own. This might sound like a no-brainer, but one way to beat buyer’s remorse is to decorate your new home the way you want to decorate it. Don’t worry about how it’s “supposed” to look, just make it unique in such a way that it fits your personality and your lifestyle. It’s your home and you can do what you want to with it as long as it fits within the confines of your particular housing association (assuming that you bought a home in a housing association).

2. Stop dwelling on it. If you have bought a home and you are unsure if you made the right decision, just move on. Whether you made the right decision or not is a moot point because now you own the home. Stop dwelling on what you should have done and make the best of your new investment.

3. Have a housewarming party. By inviting your family and friends to your new home, you will feel like you accomplished a great task. You now have a beautiful home where you can entertain all of those people who are close to you. Planning for a housewarming party will also motivate you to clean up your new house and make any repairs beforehand. When you see your home’s full potential, you will be excited about being the new owner of it.

4. Mingle with your neighbors. The more friends you make in the neighborhood, the better you will feel about living in your new home. Invite them to your housewarming party so you can introduce yourself and your family. Wave to them when you see them outside. Bake some cookies and go door-to-door when you first move in to introduce yourself. Bring the family along and introduce them as well. There simply isn’t enough of that in today’s society and once your neighbors get over the initial shock, you will probably become great friends with them.

5. Think of the positives. There are many great things about owning a home. It is a sense of accomplishment. Owning your home allows you more freedom. Owning your home gives you more space. It also makes you feel more grown-up. Focus on these attributes and your buyer’s remorse will soon disappear.

Common Misrepresentations by Home Sellers

Common Misrepresentations by Home Sellers

Unfortunately, you cannot always truest sellers of a home. Here are some common things that sellers misrepresent when they are trying to get a buyer to purchase their home.

When you get ready to buy a home, it is up to you to do the homework and research to ensure that you are getting a quality property that is worth your money. You cannot depend or rely on the seller’s word because they often misrepresent the home in various ways and once you sign that bottom line, you are stuck with the building regardless of what the seller told you about it. Here are some common misrepresentations and outright falsehoods that you should watch out for as a home buyer.

The House Does Not Have Pests
The seller might say that the house does not have pests, but you cannot know for sure until you have a home inspection. Most inspections do not include looking for pests and other critters inside the walls so you may have to ask for the inspector to include this as part of the service. It will probably cost a little more, but it may be worth it if there are pests and bugs living inside your walls. Termites, mold, mice and other problems could be living in the home and the seller may not even know about it.

Maintenance Costs and Taxes are Inexpensive
A seller will say many things to entice a buyer into buying their home. As a result, they may try to downplay the cost of the utilities, taxes and maintenance costs of the home. One way to get around this is to ask the seller to see their last few bills so you can at least get an idea of how much extra you will be paying each month. Does it cost hundreds of dollars a month to heat the home? Are the property taxes reasonable or outrageous? These are just a few of the extra costs to consider when buying a new home.

Developers are Adding Golf Course and More
When considering buying a home in a new development, the seller might tell you about the builder’s plans to build a community pool, a golf course and many other features that are attractive to today’s home buyer. However, you should always ask neighbors and possibly even the builders if those plans are still on track. As a result of the economic downturn, many builders have run out of money and have abandoned their original plans to build many of these features in their developments. Many states have disclosure laws that state sellers must inform buyers of these abandoned plans, but that does not mean it always happens.

Remember, when you are buying a home, it is up to you to find out the information about it. The seller wants to make the home look like a better deal so they are going to dress it up and make it sound great. But you are the one that will be paying on a mortgage for the next 30 years so take it upon yourself to educate yourself so you can make the best financial decision possible.

Answers from a Mortgage Expert

Answers from a Mortgage Expert

Have you had questions about the mortgage industry in general? Here are some highlights from a recent interview with a mortgage expert.

We have all had questions about mortgages at one point or another and getting the answers we need is not always easy. But Tom Champion, who has been a mortgage loan originator and now works as a regional manager for Mortgage Loan Inspection, took some time in an interview with the Baltimore Sun to answer some pressing questions. Here are some highlights of that interview with a paraphrasing of the questions asked and the answers given.

What is the problem with a family making about $63,000 a year financing a home that costs $226,500? Is this a realistic mortgage payment for such a family?
According to Tom Champion, there is a problem with simply being able to afford a mortgage payment. In this case, the family would be approved for the loan according to FHA guidelines. However, after reviewing their budget, they would only have about $100 left over at the end of the month and they would not be able to contribute to any savings plans, college funds or retirement accounts. If someone gets sick or misses a paycheck, the family could be on the road to financial disaster.

Mortgage loan lenders are not going to be concerned about how much you have left over after making the mortgage payment. They will tell you that you can afford the payment but they will not often tell you that you can barely afford it. When taking out a mortgage loan, always separate yourself from the emotion of the purchase and make a realistic decision based on your budget. Tom calls people who simply “afford” their mortgage payment “house poor.”

How can a person or family determine how much mortgage they can comfortably and realistically afford?
Before applying for a mortgage loan, a family should always come up with a written budget. This budget should have a list of your expenses and your income. Include all of your expenses throughout the year, including your property taxes, insurance payments and more. Once you have this, adjust the data to include the new house payment, the new property taxes, the new insurance and any other expenses for the new home. You should even consider how much farther (or closer) you will be to your job and the different gas expenses.

Once you have all of this, you have a bottom line for what you can afford and still have money left over for living expenses, savings and other necessities. You can also see if any lifestyle changes are needed in order to afford the mortgage payments comfortably.

Champion urges home buyers to take their mortgage loan seriously. You are committing to a 30-year debt in most cases so it’s not something you can take lightly. For most people, buying a home will be the largest investment they will ever make. Allow your logic and rational side to make the decision rather than your emotional side to ensure a well-informed decision.