Buying your first home is an exciting time in your life. Nothing can compare to rolling up into the driveway of a beautiful home for the first time, knowing that this is yours. Nothing can raise your spirits more.
But you need to take a few steps back because the process is not that easy. In fact, if you do not approach it correctly, it could end before it begins. Let’s go over some of the first-time homebuyer’s most common mistakes and how you can avoid them like a pro.
Not Getting Preapproved For A Home Loan – Getting preapproved for a loan before you begin shopping gives you an idea of how much you can afford to spend. This will save you time when house shopping because if one on your list is over your budget, you can cross it off without wasting time looking at it. Avoiding this mistake is simple; find a reputable lender and get preapproval before you start looking.
Not Setting A Budget – One of the biggest mistakes the first-time buyers commit is to get themselves into a house that they cannot afford. The way to avoid this issue is to build yourself a personal budget. This gives you a detailed breakdown of your bills and what you have left that you can put towards house payments. You should always have a budget, but if you want to avoid this mistake, take the time to create one that gives you an idea of what you have to work with.
Not Checking A Credit Report – One of the first things your lender will do is run a credit check on you. This gives them an idea of how well you pay off your bills and how much of a risk you would be to them if they did offer you a home loan. If they see something they do not like, they will deny you the loan you need. It cannot be stressed enough that you need to know what your report says before you apply for any type of loan. If it needs work, fix it before your apply. This is one of the most common first-time homebuyer mistakes, so take the time to check and fix your credit report before moving forward.
Not Getting A Home Inspection – When you buy a used car, one of the first things you do is get it checked out by a professional. Buying a home is no different. You want to hire a professional that will give you an unbiased, honest evaluation. This is the only way to ensure that you are aware of any issues the house may have before moving in, if you choose to deal with the problems that is. You may find that there are simply too many problems to cope with, so you can move on to your next choice without looking back. Never purchase a home without getting an inspection first. An inspection by a professional that you hire, not one working for the current owner or the real estate company you are going through.
Not Making A Sizeable Down Payment – The more significant the down payment, the better the terms and rates you will get on a loan. If you do not have much money saved up yet, do that before trying to get into a home. It is understood that you are excited and want a home to call your own. But if you take the time to save up enough money to put a sizeable down payment on a home, your lender will offer you a much better loan. A loan can get you into a bigger house than you would normally qualify for.
These five mistakes are so common that they are some of the first things a lender will check into. As a first-time homebuyer, you will want to be one step ahead of the lenders, the sellers, and the current homeowners.
The best way to get a good deal on your first home is to know what you are walking into and be prepared to go through the buying process. A process that can be very stressful or can be a snap. It depends on how you approach it, so get your ducks in a row and avoid the common mistakes above.