“No down payment” mistakes are easy to make!
If you don’t have to hand over a down payment, then you won’t have to save up as much before purchasing your home, right? Wrong! While not paying up front might seem like an easy way to save money, there are still quite a few costs associated with purchasing a home.
Here are some “no down payment” mistakes you might be at risk of making:
1. Picking the Wrong Mortgage
It’s important that buyers who choose no down payment mortgages have an effective strategy. Loans that don’t require a down payment often come with higher interest rates and the requirement of obtaining Private Mortgage Insurance. These factors make the month-to-month payments higher, albeit still less than paying an entire deposit up front.
2. Forgetting to Factor in Moving Expenses
Moving costs money!
If you are moving yourself, you’ll need to think about the cost of
- Moving Boxes
- Packing Tape
- Moving Van
- Meals for those helping you
If you are moving with a company, you’ll want to plan for the listed expenses plus
- The labor of the movers who pack and ship your belongings
The average cost of moving in the States ranges from $800 to $1,200 with prices fluctuating heavily based on distance, so make sure you have enough!
3. Thinking that Homeownership is Inexpensive
When you own a home, you are completely responsible for it. If the heater breaks, you have to pay to fix it. If the dishwasher leaks, that’s on you. There is no landlord to reach out to for help.
So, even if you purchase a home with no money down, avoid the very common no down payment mistake of forgetting to save for your home’s rainy days – which might come sooner (and more often!) than you might think.
4. Forgoing a Home Inspection
Home inspections are an essential part of buying a home, so skipping over them is one of the biggest no down payment mistakes there is. You can read more about why inspections are so important here, but a professional home inspector will usually find at least two to three things that need to be addressed.
If you don’t have to pay up front, you might be tempted to skip this step – don’t!
5. Not Using a Realtor
When obtaining a “no money down” mortgage, using a Realtor is imperative. An experienced Realtor will know the requirements the property must meet to qualify for the loan, so without their insight you risk wasting a lot of time.
Realtors provide essential services like a Comparative Price Analysis. This means they can tell you how your potential home is priced against other homes in the area. Down payment or not, you’ll want to know you’re getting a good deal.
Hoping to make a house a home in the Augusta area? Contact us.