A real estate purchase, due to its complexity, high stakes and regulatory aspects, is unlike most any other type of transaction. Every parcel of land, with or without improvements, is unique, so transfers of ownership require careful preparation based on analysis by a skilled professional. Here are a few of the mistakes that home buyers should avoid:
- Overextending yourself financially — Let’s say you find that perfect dream home in a dream neighborhood. Maybe the bank preapproved you for more than you were planning on spending, so you think you can probably afford it. After all, the bank wouldn’t lend you more than you should responsibly borrow, right? In reality, you may be taking on far more debt than you can handle, especially if you are banking on inflation and your prospects of making more money down the line in order to make that monthly payment manageable.
- Not understanding your finance agreement — The financing agreement may be the most complicated part of buying a house. You are typically looking at more than 100 pages of small print that govern everything from the bank’s right to repossess the property if you fail to make your payments on time to the ability of the bank to jack up your mortgage rates should the market rates adjust. That’s not even to mention the actual terms of the financing, such as the interest rate or the “points” that you may be purchasing in order to get a lower long-term interest rate.
- Inadequate insurance coverage — You may not realize that your homeowners’ insurance coverage does not extend to major natural disasters such as floods or perhaps even earthquakes. These limitations lurk in the fine print, leaving you to find them at the worst possible time — when you are recovering from a disaster. Consulting with your attorney on your insurance policies, their limitations and what policies are required by your mortgage lender should be done at the time of the home purchase, rather than after the fact.
There are a ton of hidden expenses that should be identified and accounted for when you are buying a home — such as flood insurance, HOA fees and occasional major repairs, such as a leaky roof. Having an experienced real estate attorney by your side will help you make sure you haven’t overlooked these potential pitfalls. Salas Law Firm guides home buyers in the Fort Lauderdale area from offer to closing and takes all legal steps necessary to ensure buyers’ rights are protected. Contact us online to schedule a consultation.