In a perfect world, buying a home would come with zero regrets. It should be a logical decision, right? However, we all know that just isn’t the case for most of us. It’s easy to get emotional during the homebuying process, especially if it’s your first home. Falling in love with a home before evaluating it to ensure it meets your current and future needs can lead to big regrets.
In fact, according to a 2019 Zillow survey, 81% of young homeowners between 18 and 34 had at least one regret about their home purchase.
What were their biggest regrets? Let’s break it down.
Biggest Regret #1: Oversized Monthly Payment
About 30% of millennial survey respondents regretted the final monthly mortgage payment that they were obligated to pay. It can be seductive to imagine that once all the paperwork is signed, you’ll be able to come up with that couple hundred extra dollars a month to cover the new payment. But add on maintenance costs and surprise bills for car repairs or life emergencies, and that few hundred a month can become harder and harder to find as time goes on – not easier.
Ensure that you can comfortably pay your monthly mortgage payment each month – without making serious sacrifices.
Biggest Regret #2: Rushing the Process
Buying a home is a big financial decision, and like any big expenditure, shouldn’t be rushed. However, fluctuating interest rates, competitive housing markets, life circumstances, and the opinions of friends, family, and real estate professionals could make you feel rushed.
Nearly a third of respondents felt that they were rushed into making a homebuying decision, without the chance to consider all of their options.
It’s vital to ensure that you understand the mortgage process, and what the financial obligations and ramifications will be for you in the short- and long-term. Never feel pressured to make a quick decision. The average time a person spends in any one home they own is about eight years. This is a long-term commitment!
Biggest Regret #3: Locking in a Bad Interest Rate
There’s nothing like mortgage rate fluctuations to make one experience buyer’s remorse. Interest rates are constantly changing, and the shift of just a few fractions of a point can make a big difference in the final amount of interest you pay over the life of a loan.
The good news about interest rates is that if there is a significant change in interest rates after you lock in your rate, you can always refinance at the lower interest rate. Just be sure that you analyze the pros and cons of doing this.
Biggest Regret #4: Getting the Wrong Type of Mortgage
The array of mortgage products out there are great when you find the one that’s best for you, but can be confusing and frustrating when you don’t. Fixed rate vs. adjustable rate? First-time homebuyer loan, or traditional loan?
Ensure that you speak to a loan specialist – such as one of our professionals at Mercer Savings Bank – to evaluate which option is best depending on your personal situation.
Biggest Regret #5: Buying Instead of Renting
Buying a home isn’t for everyone. FOMO, or “fear of missing out” is a real thing, and if everyone you know has bought or is buying a home, you may feel pressure to do the same. However, if you intend to move in the next two or three years, or need to maintain flexibility for a career that requires you to move often, home ownership may not yet be the best option.
Renting isn’t a bad word! When you’re ready to buy a home – the right home will be out there for you.
Regret-Free Home Buying
Learn more about the ins and outs of buying a home in our Mortgage 101: Beginner’s Guide.
Ready to fund your dream home? Contact one of our local mortgage loan specialists today online, or visit a Mercer Savings Bank location near you.