Buying your first house can be considered one of the most important periods in adult life. It can be equally as exciting as scary to some. That is why it can be easy to be overwhelmed with home shopping and be lead to some irreversible mistakes.
To escape all that, take some notes from the list below of the most common first-time home buyers’ mistakes and try to escape those.
1. Talking to only one lender
Most of the first time buyers end up finding a lender and sticking with him/her without checking other options available to them that could potentially save thousands of dollars on the table.
TIP to consider: The more you shop around and introduce yourself with available options of banks and lenders, the better foundation for comparison you achieve. On its turn, this will ensure the best possible deal with the lowest rate possible when getting your first home. Be careful not to overlook it, though.
Have some three of four different lenders for consideration, check and compare lender fees, loan terms, and rates and you will surely eliminate this common mistake of first time home buyers’.
2. Buying a house you cannot afford
Sometimes it happens that we cannot help but fall in love with a house that we simply cannot afford. However, overextending yourself and your available budget will only bring you more worries and stress in the overall process.
TIP to consider: In order to avoid this mistake, you can spend more time figuring out the exact range of budget you are ready to pay. Various mortgage Affordability calculators can come in handy in figuring out the stretch of your pocket. Besides, being maximally prepared, including in the financial sense as well would only benefit the smooth process of first time home purchasing.
3. Ignoring VA, FHA and other available programs
A vast number of first-time homebuyers need to and sometimes want to take small down payments. However, they are not carefully considering the details of government programs, which make it easier for them to buy their desired first house.
TIP to consider: Simply check the details and investigate a little more on the available loan types in your country. Take your time to research those and write down beneficial ones with their offered advantages.
4. Shopping for a house before applying to a mortgage
This is another common mistake in first-time homebuyers considering the fact that mostly it’s much more fun to look for a house to have a serious meeting with home lenders about the specifics on the finances. This leads homebuyers to end up with visiting properties before finding out how much they will be able to borrow. This on its turn, leads them to disappointment when they discover the wrong price range or when they are not able to make a serious offer corresponding to the price.
TIP to consider: Consult with your home lender about having a home loan before starting to seriously shop for a home. The preapproval or prequalification process could involve the review of your income and expenses, and can also help to make your bid more compatible.
5. Clearly understanding the cost of homeownership
Buying a home does not end the story. After that, the monthly bills will keep stacking up. There are various bills like gas, cable, electricity, and many more. If you did not take into consideration all the finances connected to these additional expenses and are happy only with owning the home. Then you might face some serious financial problems of sustaining it and additional stress.
TIP to consider: To escape this mistake, you can either research on your own about the neighborhood property taxes and typical costs or work with a real estate agent to figure those out. Also, you can ask for the last 12 months’ utility bills from the previous owner, to have a general idea about the estimated possible expenses. This will help you to have a better financial plan on the way you will sustain your life in the new house.