Prepare for the unexpected when you’re buying a home

The home buying process isn’t easy. It’s important to remember that the road to homeownership is full of twists and turns. So it’s best to prepare for the unexpected. Don’t believe us? Here are a few unexpected hiccups that may come up during the home buying process.

• Unexpected expenses. Buying a home is expensive. It’s probably the most significant financial decision you will make. But there are more costs during the home buying process than simply paying your down payment. For example, closing costs are often more expensive than many potential homeowners realize and can include fees for lawyers, a home inspection, title fees, and more. Set aside at least 2-8% of your down payment savings for closing costs.
• Title issues: Property title issues occur more frequently than people think. There are all kinds of title issues. For example, sometimes the seller doesn’t have permission to sell, or there is a lien on the property that no one knows about. Title issues can be a lot of different things. Be prepared for title issues during the closing process, and hire a good title agency or real estate lawyer if the need arises!
• Documentation issues: When you apply for mortgage financing, you will need a lot of documentation to prove who you are and your financial status. Gathering all the necessary documents can be complicated and expensive, especially if you have to order new government-issued documents. We recommend checking your documentation before beginning the home buying process to ensure everything is in order.
• Unexpected repairs. Sometimes a home inspection turns up more problems than you’d like! If you’re buying a home in a busy marketplace where properties are scarce or buying without an inspection (don’t do it!), you may be on the hook for repairs or renovations to make the property liveable before you move in. Set aside some extra money for home repairs when you get possession.
• Higher interest rates: Rates are rising right now, and you may not qualify for the interest rate you thought you would get a year ago. When that happens, you can either delay your home purchase and wait for rates to go back down or buy at a higher rate. Be sure you understand the consequences of both choices before you sign on the dotted line.

Are these all the unexpected problems that may arise during the home buying process? Absolutely not! We’ve seen it all, and there are plenty of ways the process is derailed by the unexpected. But after all our experience, we’ve learned a few things. 1) It pays to save up a little extra money for unexpected expenses. 2) Make sure you work with experienced real estate and mortgage professionals (like us). We know the industry and all the unexpected problems that can arise!