October 18th, 2018 6:48 PM by Jackie A. Graves
No matter the
age or life stage, everyone makes mistakes when it comes to homebuying.
picking the wrong location or buying more house than you can afford, the
mistakes are often universal, says Ilyce Glink, author of “100 Questions Every
First-Time Home Buyer Should Ask.”
in your 20s, your life isn’t the same as when you’re retired, and yet you’re
both going to make timing mistakes,” Glink says. “You may make location
mistakes. You may not think about what you need for every stage of your life,
so you buy the wrong size home or make a bad money decision.”
Even so, certain
age groups are more susceptible to particular missteps than others. Here are
common mistakes homeowners make at each age, and a few ways to avoid them.
their 20s are just starting their careers and usually have less money saved
than older homebuyers. For these folks, paying less for a mortgage is
not just a priority but a necessity.
This can be a
bad thing if buyers get into an adjustable-rate mortgage (ARM) thinking they
will earn more money down the road, says Michael Corbett, host of Extra’s
“Mansions and Millionaires” and author of “Find It, Fix It, Flip It.”
buyers might get an adjustable-rate mortgage because the rate
is really low; it’s like a teaser rate,” Corbett says. “And they think,
‘I’m going to get it because I’m improving in my job situation or I’ll pay off
my student loan.’ But if that doesn’t happen then, when interest rates go up in
five to seven years, they’re going to see their mortgage rates double or even
If the rates
on ARMs increase dramatically, there’s a chance the borrower will no longer be
able to afford their mortgage payment, which could put
the house in jeopardy. Before leaping into an ARM with just a dream of a house
and a hope for a bigger paycheck, consider other cost-saving alternatives.
popular programs, like FHA loans and VA loans, there are other lesser-known initiatives
geared to homebuyers on a fixed income. The HUD-sponsored Good Neighbor Next
Door program, for example, offers homebuying assistance for law enforcement
officers, firefighters, emergency medical technicians and pre-kindergarten
through 12th-grade teachers.
federal money, there are also state-sponsored grants for first-time homebuyers, which you
can typically find on your state’s website.
Not thinking about the future
their 30s blunder by not considering a future family when they’re standing in
the middle of downtown condo with gorgeous views and access to a rooftop pool.
While snagging the ultimate bachelor or bachelorette pad might seem alluring,
it can also cost you money down the road, Corbett says.
is they end up having to sell — maybe not at an appropriate time — the bachelor
pad and get into another house,” Corbett says. “Now they’re doing it under
duress instead of planning ahead the first time, so there’s a lot of money lost
If you plan
on having a family, it’s important to consider that when you’re home shopping,
even if you’re currently single.
Glink says to
ask yourself these questions before buying a home:
should be an integral part of what you look for in a home. For example, if you
think you might want kids or even a dog, you’ll probably want to choose a home
with a backyard versus one near a great nightlife.
Overestimating your budget
In your 40s
and 50s, you tend to have more money, which can lead to overestimating your
budget and buying a house you can’t afford. One way to avoid this is to figure
out your lifestyle comfort level, Glink says.
you can afford a $500,000 home doesn’t mean you should buy one. If you’re
married and both you and your spouse are working, figure out whether or not you
can afford the mortgage payment if one of you gets laid off,” Glink says.
your budget is a critical step for buyers of all ages. Even experienced
homebuyers can make the mistake of spending at their limit, which can mean
making sacrifices that they weren’t prepared to make.
Use Bankrate’s home affordability calculator to
determine how much you should spend.
for buyers in their 40s and 50s is to leave room in the budget for things they
aren’t willing to give up — for example, private school for the kids.
and up: Falling in love with that vacation home
homeowners in their 60s are retired or getting ready to retire. Among the many
decisions retirees make is where to live. While some choose to stay where
they are, many plan on moving to warmer climates or even another country.
mistake retirees make, Glink says, is going on vacation, falling in love with
the place and moving immediately. Relocating and buying a home is an expensive
process, so retirees should be sure they familiarize themselves with a new
place before buying.
retirees make the mistake of going on vacation … and they think, ‘Oh my god,
this is great,’ and they go home immediately and they sell their
house,” Glink says. “They get there and they hate it. They didn’t spend
enough time there.”
a new house in your vacation paradise, be sure to visit the area in every
climate. For example, Florida is great in the winter, but many people might not
be comfortable in the humid summer months. The same goes for northern areas —
what’s blissful in one season can be awful in another.
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