Buying your first home in Tehachapi can be an exhilarating experience. Make sure you avoid the common mistakes that some first-time buyers make.
For example on a $100,000 mortgage, the difference between a 5% rate and a 6% rate amounts to about $23,000 in interest over the life of the loan. The larger the loan amount and the higher the interest rate results in an even larger amount over the life of the loan.
Shopping for other things at the same time. If you are planning to buy a home, don’t plan on buying any other large ticket items around the time leading up to the close of escrow. If you want a new car, wait until after you moved in. Ditto the new appliances or the vacation you wanted to relieve the stress of buying your new house.
Try to avoid any large purchases for at least six months before the house purchase. This also includes doing things that will flag your credit report. This is not the time to accept a new credit card to make a purchase because you get 10% off of today’s purchase when you do.
Lenders may check credit scores right up to the time of closing. It is not impossible that they would refuse to fund a loan if some significant change occurred.
Skipping an inspection. Inspections could fill a blog all by themselves! Your budget may be tight, but it is best to have inspections performed by professionals. Cheaping out by skipping inspections or conducting your own inspections is not in your best interest. You are not saving any money if you find out after the fact that that a major repair is required. The cost of a furnace or septic tank is much greater than the cost of the appropriate inspection.
Buying without contingencies. Make sure your purchase offer is made contingent on the results of your inspections. One option is to request the seller pay for any necessary repairs. If they refuse and you are not willing or able to cover the costs yourself, then you can cancel the contract.
Neglecting to budget for insurance. I you are paying cash, you are not required to have insurance, but it is always a good idea to insure an investment as large as your home. In the event of a catastrophe that destroyed your home, what would you do to recover from that kind of economic devastation? If you are paying for your home with a loan, then the lender will require that you carry insurance. Keep in mind that the lender may only require fire insurance, but you will probably want additional coverages.
Start shopping for insurance even before you shop for your Tehachapi area home. It can be a surprisingly large expense that should be included in your budget from the beginning.