Buying a property is likely one of the largest financial investments you’ll make in your lifetime. That is why it is very important to get it done right. For the best financial outcomes, avoid the following mistakes.
1) Taking on too much
You believe that you’ve finally found your ideal property, but it’s outside your budget. So, you try to stretch that budget and simply take out a bigger mortgage. This decision can be disastrous. Taking on more debt than you can afford will leave you struggling to pay utilities and zap any other financial goals. A good rule of thumb is to limit the cost of your house payment (including taxes, insurance and any HOA fees) to 25 percent of your take-home pay.
2) Skipping the pre-approval
Getting pre-approved will help you with not taking on too much, as it will provide guidelines for what you can realistically afford. It will also give you a financial advantage when negotiating for any property. Sellers prefer to work with buyers that they know can afford their property, so get pre-approved before you shop, so you can submit your pre-approval with any offers.
3) Skimping on the down payment
The more money you pay up front, the less interest you’ll pay over time. If you save at least 20 percent for a down payment, you can also avoid PMI, which is a fee to cover insurance that protects lenders when a buyer has little equity in the home. And don’t forget to include closing costs and moving expenses as you save up for your purchase.
4) Doing everything yourself
An experienced real estate agent helps you determine a reasonable price for any property you are considering to buy. We can also negotiate the best price for the property. Plus, the seller pays the agent’s commission, so you get all the expertise at no cost to you. If you’re considering to buy a property in Panama, do not hesitate to Contact Us for any questions or inquiries you may have. We are happy to help!