The time has come for you to buy a new house. Maybe it's time to upsize your home, or you don't want to pay the rent anymore. Either way, this is a stressful and serious process. For this reason, you should check out some of the most common mistakes first-time homebuyers make. After all, these mistakes can be quite expensive, so you should do your best to avoid them.
Not being pre-approved when looking for a home
Whether we like it or not, buying a home for the first time usually requires taking a mortgage. However, what most buyers do is view homes without being pre-approved.
It's a competitive market, so buyers need to take one step further to get the house they desire. When it comes down to choosing a potential buyer, sellers will rather go for a buyer who's pre-approved, than for the one who's not. Make sure that you're pre-approved for a mortgage before you start looking for homes. That way, once the home of your dreams shows up, you'll be ready, and this will show the seller that you're a serious buyer.
Buying a home they cannot afford
In order to plan for quality time in your new home and city, you need to be able to afford the life you wish to lead. And this will not be possible if the price of the house was more than you were able to spend.
And as already mentioned, getting pre-approved is essential. But also, before viewing homes, you need to determine how much you can spend on your new house. If not, you might get pre-approved for more than you actually need. Make sure that a house payment doesn't take up more than 1/4 of your income. Since a mortgage payment is a heavy burden, it's important to determine how much exactly you can afford and not go above that.
Making the small down payment
Purchasing a home is a considerable expense and, unfortunately, not the only expense. There's more down the line, from closing costs, moving expenses to costs of renovation. For this reason, you don't want to empty all your savings. But, as a result, you might fall into the trap of making a small down payment.
While monthly payments seem easier to deal with, a down payment feels more like a hit. This is why many buyers are tempted to make a small down payment. However, while it seems like you're not emptying your savings at the moment, this can cost you much more later on. Remember, the less money you pay now, the more you'll have to pay in interest, and the more you'll need from your lender. Besides, in case of a down payment that's less than 20%, you'll need to make an additional monthly payment for private mortgage insurance. To avoid this, save enough money for a down payment of at least 20%, and you'll even be able to get better rates.
Save yourself from troubles down the line.
Rushing the process
We all want to find a dream home as soon as possible. With all of the excitement, you may feel like wanting to pre-pack before the movers arrive and take your belongings to your perfect new house. But, while it's good to plan, remember to be patient and wait for the right circumstances.
Buying a home is a complicated and time-consuming process. If you rush it, this can cost you when the time comes to pay for the down payment and closing costs. Also, take the time to address your credit report items, as they can lead to you not getting favorable loan terms. Make a timeline and work on boosting your poor credit score. Plan one year ahead of the purchase and make sure that the timing is right.
Avoiding the mistakes the first time home buyers make
Deciding to own a house is a major life event. Finally, an idea of a home that you'll love to invest in, and a place that you can call your own, can lead to getting attached to a home. But, this is not the time to make an emotional decision since this is one of the most significant investments in most people's lives.
If you make an emotional decision, you can end up paying more and get yourself in a difficult situation. To avoid this, create a budget and try to stay within it, no matter how much you seem to love the property you can't afford. Remember, you've fallen in love with the idea of this house, rather than the house itself. It's not a good idea to become emotionally attached to a place that's not yours.
Becoming attached to the particular house
Of course, you want to find a home that fulfills your desires and meets your needs and expectations. However, once you come across a home with an amazing landscape design you love, you might oversee other important issues, like the neighborhood. Unless you want to end up hating your neighborhood, do the research. Safety, proximity to amenities, traffic, and walkability can easily make your life more comfortable or more challenging. Visit the area at different times of the day to get a sense of the vibe and traffic.
Also, keep in mind that choosing the right city is crucial to you and your family's life. An environment with matching values and people with a similar lifestyle might be more important than an extra room. You can always remodel and make some small changes. Make sure to have a bigger picture at all times, and don't be short-sighted when choosing your house.
In order to avoid the most common mistakes first-time homebuyers make, you must be aware of them first. And then deal with them ahead of time. Knowing the challenges that lie ahead will be of immense help once you experience the stress of the home-purchasing process.
About the author: Bob Rogerson has been a blogger and content writer for eight years and is particularly interested in real estate, the moving industry, and home improvement.