If you are getting ready to buy your first home, chances are you are feeling a bit excited, as well as a bit scared. Purchasing your first home is a big step and you want to do everything that you can to find the home that you love, but also one that you can afford. The problem is so many people rush into the home buying process that they end up regretting their first home rather than loving it. To prevent this from happening to you, here is a closer look at the 10 mistakes first time home buyers make.
10 Mistakes First Time Home Buyers Make
Not getting pre-approved
Many potential home buyers do not realize how important a pre-approval is in today’s market. Many sellers won’t even consider your offer without a letter of pre-approval, which will make competing with other buyers very difficult. Plus, a pre-approval will give you an idea of price range when it comes to houses, this way you are not falling in love with a home that you cannot afford.
Not checking your credit report
Before getting a pre-approval letter you will want to pull a copy of your credit report from all three credit bureaus. Look carefully for any inaccuracies and make the corrections before applying for a home loan. All three credit bureaus are required to provide a FREE credit report once per year. Go to this site for your free credit report (no credit card required!).
Not finding the right real estate agent
Never think you can navigate the world of real estate on your own; you always want to obtain professional help. You want to find an agent that you are comfortable with. You don’t want an agent that rushes you to make a purchase you’re not happy with.
Failing to consider additional expenses
When buying your first home you have to consider expenses, such as appraisals, inspections, closing costs, homeowner’s insurance, mortgage insurance, property taxes and many others. When creating your budget and determining how much you can afford, you need to keep all of these expenses in mind.[/vc_column_text]
Not getting an inspection
Get an complete home inspection before you close so you know the condition of the home before you make the purchase. The last thing you want is a home that comes with nothing but unexpected repairs.
Not making a down payment
With a conventional mortgage you must pay mortgage insurance if you put down less than 20% for your down payment. Mortgage insurance is an additional expense that quickly adds up, so many people get all of their money together to make a 20% down payment. This will help you avoid costly insurance payments.
Opening new lines of credit
Lenders will pull a buyer’s credit at the time of closing to ensure that their financial situation hasn’t changed before they put the final approval on the loan. If you go out and finance anything after starting the home buying process, chances are you will not get the final approval you are looking for.
Being too picky
It’s great to have a list of things you want in a house, but you must also be realistic. Compromise on some things, but hold firm on others. For example, if you can live with ugly wallpaper for a few years do it, but don’t settle for a 2 bedroom when you want a 3.
Neglecting to check out the neighborhood
Researching the neighborhood is vital to buying a home. You might love the house, but discover that the neighborhood isn’t so safe or the schools are not that good. Always do your research to ensure you are making the best choice.
Buying a home you can’t afford
Just because the bank says you can afford a home doesn’t mean that you actually can. You need to create a budget to determine what kind of monthly mortgage payment you are comfortable with, and purchase a home in that price range, regardless of what amount your pre-approval letter states.
If you do find yourself in a situation where you made a home purchase that isn’t working out, contact 800-BUY-Kwik. We purchase homes in any condition, anywhere.