First Time Homebuyers Biggest Mistakes
So you’ve decided to take the plunge and buy your first home. Congratulations! But before you start house-hunting, check out these 7 mistakes many first time home owners make. Avoiding these mistakes will save you money, heartbreak and time.
1. House Hunting Before GETTING PRE-APPROVED
The last thing you want to do is set your sights on a home you can’t afford. To avoid that heartache, get pre-qualified or pre-approved from a mortgage lender before you start viewing homes. Plus, that letter assures your realtor and sellers you are serious about buying.
2. Talking To Just One Lender
You want to get multiple quotes from multiple lenders to make sure you’re getting the best deal. Many experts recommend you get at least 3 different quotes. This will help give you confidence you’re getting the best deal and lowest interest rate possible.
3. Buying More Than You Can Afford
What a lender’s willing to loan you isn’t necessarily what you can afford. Some first time buyers, upon hearing how much a lender’s willing to lend them, go full bore and buy a home they simply can’t afford. Focus on the monthly mortgage payments and what you can realistically handle, not what a lender will give you. Experts say you don’t want a home that costs more than 43% of your gross income There are numerous mortgage calculators online to help you figure out your monthly payments.
4. Create A Home Expense Cushion
Every homeowner will tell you there are always unexpected costs to home ownership. Just a few months after I moved into my house, my HVAC broke and had to be replaced. You want to leave yourself a healthy cushion to help cover any surprise costs. Experts recommend you have 6 months of savings in case of an emergency.
5. Not Checking out First Time Buyer Programs
Look into VA and FHA loans which allow low down payments. Also, there are grants for first time buyers who are teachers, firefighters, law enforcement and emergency medical technicians.
6. Credit Report Errors
Make sure you’ve cleared up any errors on your credit report as this could decrease your credit score.
7. Choosing Home Over Neighborhood
Many first time homebuyers make the mistake of buying a house they love in a neighborhood they don’t. You can alter your house if need be, but there’s little you can do to change a neighborhood you hate.