6 common first-time homebuyer mistakes that could cost you big time

Published: Friday, December 29, 2017 @ 9:42 AM

Be sure to avoid these 6 common mistakes that first-time home buyers often make Not getting a professional inspection Not putting a pause button on purchases Not keeping up with correspondence Not understanding the hidden costs of buying a home Not working with a buyer's agent Not looking into loan assistance programs

Buying a home can be a daunting task − whether it is your first or fifth time heading to the closing table. 

For most of us, it will be the largest investment of our lives. However, there are factors predicted for the upcoming year that will make purchasing a home even more stressful. 

»RELATED: House hunters, here are 5 secrets to getting the best home loan

According to Redfin's 2018 projections, inventory will remain low, especially for smaller starter-homes. Additionally, thirty-year mortgage rates are expected to rise between 4.3 and 4.5 percent. Changes to the capital gains tax may also persuade many current homeowners not to sell, putting even more strain on the inventory list. However, there are still deals to be found and your dream home may very well still be out there waiting on you. 

When you find it, be sure to avoid these 6 common mistakes that first-time homebuyers often make:

Not getting a professional inspection

The idea of paying for a home inspection for a property that you might not even buy seems like a silly concept to some, but it can save you tens of thousands of dollars in the long run. The median cost of a home inspection is $350-$600 for an average or larger sized house, according to HomeInspector.org. Compared to potential issues with the foundation, electrical system or plumbing, however, it's a small price to pay.

Not putting a pause button on purchases

Buying your first house can be an exciting process and many new buyers get the urge to buy furniture and other home essentials before their closing date. While it's understandable to want to get a head start, it is very important that you not do this. According to Kayla Sweeny, a mortgage loan originator with Southeast Mortgage, a very common mistake is "buying things on credit during the mortgage process. The credit report has to be updated to add the new debt. Debt-to-Income ratios have to be recalculated and the file has to be reviewed again. This could potentially kill a deal."

Not keeping up with correspondence

Sweeny also noted that many first time buyers fail to check their mail, e-mail or messages regularly. "There could be critical loan documentation that a mortgage loan originator or processor has sent the borrower. The entire process is time sensitive. A sense of urgency is a must." This also applies to correspondence from your real estate agent, appraiser and inspector.

(For the AJC)

Not understanding the hidden costs of buying a home

Everyone knows that you'll likely require a mortgage to purchase a home. Unfortunately, many people fail to factor in the other costs associated with purchase - appraisals, earnest money, inspection costs, taxes, HOA dues, utilities and so on. Rafael Castellanos, president of Expert Title Insurance, told Bankrate.com, "They have an idea of what their mortgage payment is going to be, but they don't realize there's much more to it."

Not working with a buyer's agent

Some first-time buyers believe that they don't need or can't afford a buyer's agent. Nothing could be further from the truth. Home purchasing contracts can be long and confusing, filled with legalese that often baffle the layman. Eddie Hudson, owner of The Smyrna Team at Keller Williams, explains that "this means you have no representation, and working with a buyer's agent is free of charge as the seller is paying the commission."

Not looking into loan assistance programs

There are lots of loan programs out there for first-time buyers, from federal down to local levels. Many people don't know to look for them, though. Veterans should absolutely look at the VA program, while everyone else should look at the HUD website to see if any loan or grant programs apply to them. Some municipalities have programs to develop certain areas. The assistance offered can range from help with down payments and closing costs to discounted properties in certain areas.

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Local students learn how to combat scams, fraud

Published: Wednesday, April 18, 2018 @ 1:08 PM

Students in the Miami Valley are learning to recognize fraud and scams, and finding out how they can protect themselves from these potential money pitfalls.

Several schools in our area teach a free consumer life skills and financial literacy curriculum called FoolProof. 

The goal of the web-based, interactive coursework is to teach a healthy dose of skepticism in a scam-filled world.

Related: "Shimming” is the latest threat to shoppers

Kettering, Xenia, Franklin, Stebbins, Greenville and Lebanon high schools offer FoolProof classes.

News Center 7 consumer reporter Rachel Murray will find out more about what the students learn and what they can teach us about avoiding scams and fraud. 

Watch tonight on WHIO-TV at 5pm.

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Audit-proofing your taxes 

Published: Wednesday, April 11, 2018 @ 11:29 AM

Audit-proofing your taxes

First, the good news.  The IRS is auditing fewer taxpayers.  

In fact, audits are at an all-time low. You can’t completely audit-proof your tax returns, but there are ways to make your chance of an IRS investigation less likely. 
Failing to report taxable income and cryptocurrency income, are among Kiplinger’s Personal Finance magazine’s list of audit red flags.

Math errors, sizeable donations, home office deductions and deductions of unreimbursed business expenses, for example, commuting costs and clothing, are also going to raise eyebrows at the IRS.

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One of the biggest red flags is income.

The more money you make the more likely you’ll be scrutinized by the IRS, according to Kiplinger’s Personal Finance magazine.  

If you make $200,00 or more, there is a one in 80 chance of an audit, and if you make more than $1 million your odds are one in 25, according to Clark Howard’s website, Clark.com.

News Center 7 consumer reporter Rachel Murray will have insight from a local tax preparer about ways to audit-proof your tax return tonight on WHIO-TV at 5.

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‘Shimming’ has emerged as the latest threat to shoppers

Published: Tuesday, April 10, 2018 @ 1:58 PM

Shimming has emerged as the latest threat to shoppers

There’s a growing threat to your credit and debit card information, and you might not be aware of it.

It’s called “shimming.” 

New Recalls: power banks, PAW PATROL hats and more

 Scammers insert paper-thin devices into credit card chip readers that can copy your data. 

The information can’t be used to make a chip card clone, but it can be used to create a traditional mag-stripe card, which could be used to fraudulently make purchases or withdraw cash, according to Creditcards.com.

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New Recalls: power banks, PAW PATROL hats and more

Published: Friday, April 06, 2018 @ 2:35 PM

Power bank chargers, children’s play hats, and personal space heaters are among the latest products being recalled, according to the Consumer Product Safety Commission.

Portable power bank charging stations by Re-fuel by Digipower are under recall after five reports of the products overheating and melting.

The Grab and go Family Packs are three lithium-ion battery chargers in black, grey and green on a recharging docking station. 

They have the item number RF-TRIP on the bottom and were sold at the Container Store from October of 2017 through February 2018. 

Stop using the recalled chargers and contact the Container Store at 888-266-8246 to receive a full refund. 

 

Some Paw Patrol fireman hats with a flashlight attachment are under recall because they could burn your child.

There are four reports of overheating flashlights on the Nickelodeon PAW PATROL Deluxe Marshall Hat sold at Spirit Halloween stores. 

Only flashlights with SKU 01292093 and date codes 1703RY01, 1603RY01, and 1503RY01 are part of the recall.

Remove the batteries from the recalled flashlight and dispose of it. Contact Spirit Halloween at 866-586-0155 for a full refund. 

Personal electric space heaters by Vornado are under recall due to fifteen reports of them catching on fire.

The VH101 Personal Vortex heaters were sold in black, coral orange, greyed jade, fig, ice white, red, and cinnamon. 

Stop using the heaters and contact Vornado at 855-215-5131 for a full refund. 

Recreational off-highway vehicles by Polaris are under recall because cracked exhaust silencers have sparked three fires.

There are multiple model years and model numbers included in this recall. Click here for the full list.

Stop riding the recalled ROVs and contact Polaris at 800-765-2747 for a free repair. 

 

Some Scotch thermal laminators by 3M are being recalled because the plastic enclosure can overheat and burn you.

There are 10 reports of laminators overheating but no injuries. 

Stop using the white and teal recalled laminators and contact 3M at 800-772-4337 for a full refund. 

 

These recalls and past recalls can be found at www.cpsc.gov.

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