Buying a home is a serious undertaking, so it’s natural to have concerns going into the process. This especially holds true in today’s tight housing market. According to a recent Opendoor survey of 850 people, here are the top things today’s buyers are worried about.
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1. Finding a home within budget
Home prices have skyrocketed on a national level, so it’s not surprising that 41% of buyers surveyed said finding a home that fits their budget is challenging. If you’re worried about going over budget, use a mortgage calculator to figure out how much house you can afford based on the funds you have saved for a down payment.
Keep in mind that your housing costs should be 30% of your take-home pay or less. That 30% includes not just your mortgage payment, but also other set expenses like property taxes and insurance.
2. Overpaying for a home
A good 38% of buyers are worried about paying more for a home than it’s really worth. And in today’s market, that may be inevitable. No matter where you buy, you’ll likely pay more for a home right now than what it would’ve sold for a year ago.
But still, you should make every effort to avoid grossly overpaying. A good way to do so is to talk to a real estate agent who knows the area and can tell you if a price is fair or not. You can also look at recently sold homes in the area. If comparable properties just sold for $400,000 and your seller wants $450,000, that’s a red flag.
3. Finding a home in an appealing neighborhood
In the Opendoor survey, 37% of buyers said they’re worried about finding a home in a neighborhood they want to live in. Since inventory is so limited, you may want to expand the scope of your search and research several neighborhoods to give yourself more options. Sites like Niche make it easy to gather data on features like amenities and school districts.
4. Rising mortgage rates
Right now, mortgage rates are extremely competitive, but 30% of buyers worry that they’ll go up before they can lock in a home loan. However, even if mortgage rates climb a bit over the next 12 months, they’re likely to stay competitive for at least another year — and possibly beyond.
It’s also worth noting that while it may be possible to get a 30-year loan today at around 3.1%, if rates climb to 3.5% by the time you buy, that’s still a competitive rate. And for a $200,000 mortgage with a 30-year payoff, you’re talking about a difference of $45 a month for principal and interest.
5. Uncovering major issues after moving in
Discovering major repairs soon after moving in is any homeowner’s nightmare, and it’s something 29% of buyers fear. But you can lower the chances of that happening by hiring an experienced home inspector and attending your inspection while it’s happening. That way, you can ask questions and have your concerns addressed before you move forward with a home purchase.
Buying a home can definitely be a nerve-wracking experience. If any of the above concerns apply to you, be sure to address them so you don’t regret your decision afterward.