6 Homebuyer Mistakes

Roughly 70% of Canadians own our homes. 2/3 of repeat homebuyers believe their next house purchase won't be their last. Over 23% say they plan to move again within the next few years.

So here's some mistakes made when buying a home.

Buying a house you can't really afford
Keep in mind that the people you got the loan from, are going to want it back. The first rule is that your monthly housing costs should not exceed 32% of your gross monthly household income. Housing costs include monthly mortgage payments, taxes and heating expenses and, if applicable, half of your monthly condo fees. Most experts say your total monthly debts, should not exceed 40% of your income. And, as a further guideline, your down payment should be a minimum of 10 per cent and really shouldn't be less than 25 per cent if at all possible.

Underestimating your costs
Don't forget that the closing costs can easily add up. Initially, this will include a home inspection, legal fees, the land-transfer tax, and moving expenses. Later on, you'll have to factor in property taxes and homeowners insurance as well. If this is your first purchase, be sure to include some money for new appliances, additional furniture and tools, as well as lawn care and snow-clearing equipment. Then, in addition to your mortgage, there are regular maintenance fees.

Not shopping for the right mortgage
Because interest rates have been so low and most sellers want to deal with buyers who've been pre-approved for a loan, some homebuyers are too quick to secure a mortgage without fully exploring their options. That's crazy, since if you go to three different lenders, you'll likely find that each one differs slightly. How many lenders should you contact before settling on a mortgage loan? Three is probably enough, but if you have the time, check out as many as you can. Mortgage brokers are great resources here because they really do try to shop around and secure the lowest possible rate — and, since they're paid by the lender, there's no additional cost for you.

Believing everything you hear
Make sure it's on paper. Once you've fallen in love with a house, take mad pictures with an camera to protect your investment. Write down the serial numbers of all appliances as well. Why? Because a few people simply aren't honest, the may replace all the appliances with crappy ones, or take all the fixtures. Be sure to check with the current homeowners, however, before snapping photos or you may run into future privacy issues.

Not hiring a home inspector
No matter what, you should never buy a home without having it inspected — even if you're purchasing a brand new place. Steer clear of home inspectors who're recommended by a realtor or well-meaning relatives. When you do find someone, ask for their credentials and detailed references. Once they get started, be sure to follow them around. If nothing else, it's a good chance to learn what makes a house tick. Rather than simply providing you with a checklist, the home inspector should provide a written report reviewing every major home system. The entire event should take about three or four hours, result in a written report within a day or two reviewing every major system, and cost about $400 to $500. And buy during the mild weather, because when the snow melts you may see all the things that the home inspector couldn't check. Like the roof, driveways, yard etc.

Not researching the neighbourhood
What good is finding the home you've been waiting for, if you're not sure about the community in which it's located? Make sure the neighbourhood is a good fit for your lifestyle. What's the commuting distance? What about traffic? Are there recreational facilities and parks close by? How close are you to shopping, schools and libraries? Even if you don't have children, living near good schools raises your property value. Visit the neighbourhood several times at different times of the day and week, and be sure to check out your potential neighbours.

Found on MSN Money