Purchasing a home can be quite an emotional experience. It’s why most 1st time home buyers make many typical home purchasing mistakes. Because home ownership is a big part of your life, try to keep your emotions in check. Then, do your research and make the most informed decision when finally buying your dream home.
Of course, your goal is to end up with a home you love at a price you can afford. Thankfully, the process is easy and quick by learning about some of the most common mistakes that 1st time home buyers make make and try to avoid them. In this post, we break each one of these mistakes down.
1st Time Home Buyer? Avoid These 5 Mistakes!
Not using an agent.
One of the first mistakes first-time home buyers make is to go about their home buying journey without first contacting an agent. This is by no means an ideal thing to do. If you’re serious about buying a house, don’t go to an open house without first consulting a real estate agent or broker.
Agents are bound by the ethical norm that they must operate in the best interests of both the vendor and the buyer. Besides, according to Wendy Russell, “WHO you know is crucial if you want access to those properties other buyers simply don’t see”. Working with an agent is one of the best decisions you can make when looking to buy a new home.
Not applying for a mortgage early enough.
Many 1st time home buyers begin their search before meeting with a mortgage lender. However, there are limitations in many cities because there is more buyer demand than affordable homes on the market.
If you aren’t preapproved for a mortgage, you risk losing a house you already love in such a competitive market. Also, you might not have an accurate image of your budget if you don’t have a mortgage.
Failing to check credit reports or correct errors.
When choosing whether or not to grant a loan and at what interest rate, mortgage lenders will look at your credit reports. They may give you an interest rate that is higher than you deserve if your credit report contains inaccuracies. That’s why it’s crucial to double-check your credit report.
To prevent making this error, you can get a free credit report from each of the three major credit bureaus in the U.S. once a year. If you find any inaccuracies, you’re free to confront the bureaus about them.
Exhausting your savings.
If you purchase a previously owned property, it will almost certainly require an unforeseen repair within a short period. When the weather changes, you may need to replace a water heater or pay a homeowner’s insurance deductible. When things break, you may need to fix them.
Therefore, if you don’t have enough money set up for emergencies, you will quickly fall into a hole. Make sure to set aside some money for unforeseen circumstances and not spend everything purchasing the home.
Assuming a 20 percent down payment is nonnegotiable.
The idea that you have to make a 20% down payment is untrue. Granted. A 20% down payment can help you skip paying private mortgage insurance. However, most buyers can’t afford to make that kind of investment.
Lucky for you, the median down payment on a property is 12% for first-time buyers and 6 percent for repeat buyers. Some communities, may ask you to pay a larger down payment, so ask your real estate agent about specific community.
Use this information as a 1st time home buyer to make the best decisions possible when purchasing your new home. If you have any questions or suggestions, we always love to hear from you in the comments below. Also below are links that will take you to more fantastic articles about ALL things DESIGN for your home or business.
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