Buying your first home can definitely seem a daunting task - after all, there’s so much information to be learned! That’s why it’s so important to do your real estate homework so that you can avoid potential pitfalls that might sabotage your closing time or lengthen your home search. Below, we’ve done you the favor of outlining some of the most common mistakes first-time homebuyers make, all condensed into one easy blog post, to minimize the risk of you falling victim to these homebuying mishaps. So what are you waiting for? Read on for more!
1. Looking for a home BEFORE applying for a mortgage
A written pre-approval on a mortgage will never do you wrong. In fact, it can only help you further down the line in the homebuying process. Not only does it give you a clear depiction of your budget, but it also saves you loads of time in the long-run from looking at homes that aren’t realistically within your price range. Getting pre-approved is also a huge signal to agents AND sellers that you’re serious about buying a home and makes your offer far more attractive when being compared to other potential buyers. All in all? Getting pre-approved for a mortgage is the way to go!
2. Buying more house than you can afford
Don’t get us wrong, we want you to find your dream home just as much as you do, but overextending yourself by draining your savings is NEVER the way to go. Homeownership is one of the largest purchases you will make during your lifetime and so putting yourself in the hole over it will most definitely hurt your finances farther down the line. Tough financial times are often unpredictable and so if you’re already stretched thin from purchasing the house far above your budget, then the potential of you being forced into foreclosure is a hazard we’d all like to avoid. Instead, you should aim to buy LESS house than you can afford and consider how much you can afford to pay in monthly payments in conjunction with all your other monthly expenses. More often than not, we don’t need nearly as much space as we think we do and other financial obligations are important to consider since they don’t evaporate after buying a home.
3. Moving TOO FAST
Rushing the process can often mean overpaying, running into issues with closing costs, and overlooking important details about your credit history and financial profile. The better option? Plot things out a year in advance so that you aren’t making split-second decisions that could cost you more later on. After all, “the devil is in the details” and the extra care can only benefit you considering what a commitment buying a home is.
4. Being careless with credit
If you’re planning on buying a house in a few years, it’s a great idea to start building up your credit score as early as possible to prohibit mortgage approval issues down the line. One’s FICO score has a significant impact on mortgage interest rates and so paying off your lines of credit on time and in full is of utmost importance. Also remember that when buying a home, recent fluctuations in your credit history could spook potential lenders. As a result, you should avoid major purchases on credit, new loans, or opening any new credit card accounts since these affect your credit score and typically cause delays in the approval process. Instead, focus on lowering your existing balances as much as possible!
5. Fixating on the house over the neighborhood
The potential neighborhood you’ll be living in is an extremely important factor to consider when buying a home. Unfortunately, it often gets overlooked by first-time homebuyers once they fall in love with the house alone and emotions get wrapped up in their decision-making. Keep in mind that no matter how perfect a house may seem, this image will be tainted if you’re living in a neighborhood you despise. If you plan on starting a family, the local school district and safety stats will become increasingly more important as your child ages. Nearby commuter routes and local shopping centers will become important too! An hour-long commute to work each morning may sound like something you can adapt to, but could potentially sour how you enjoy your home in the future. To avoid these pitfalls, be sure to get a full bird’s-eye view of the neighborhood and visit your potential new home at different times of the day to measure what appeals to you.
Looking to get some more information on Common First-time Homebuyer Mistakes? The following articles were extremely helpful in informing our own exploration of the topic. Consider exploring the following articles for more information or call to speak with a Mynor & Associates Agent today!
Other Helpful Links
- Common First-time Homebuyer Mistakes
- Refinancing Mistakes
- The Best Way to Refinance
- Mortgage Pre-Approvals