Experience may be the best teacher, but when it comes to buying a home, it’s better to do things right the first time. If you’re planning to purchase your first place, here are six common first-time homebuyer mistakes that you should avoid.
1. Going it alone
When it comes to buying a home, every property and neighborhood is unique, and so are you when it comes to your situation, needs and goals. To help ensure you get the information, advice and solutions that are right for you, you should work with a trusted real estate agent and loan officer. Consulting with these professionals shouldn’t cost you a thing, so don’t be afraid to seek their guidance early and ask every question you have.
2. Not checking your credit scores and reports
Your credit can have a big impact on the cost and terms of your home financing. When you get preapproved or apply for a loan, your loan officer will examine your credit, but it’s also wise to monitor your credit on your own, especially if you’re planning to purchase a home. Click here to learn about checking your credit scores, and click here to learn about checking your credit reports.
3. Waiting to get preapproved
Getting preapproved for a mortgage should be one of your first steps once you’re serious about buying a home. This quick, easy and free step will show you how much home financing you can obtain, how much home you can buy and how much you can expect to pay for your monthly mortgage payment. Most real estate agents and home sellers will require you to be preapproved before you make an offer to buy a home. At Draper and Kramer Mortgage, we can typically preapprove someone the same day either over the phone or online.
4. Not preparing for some ups and downs
Buying a home is an exciting time and a major life event. It can and should be a fun process, but you should also expect some bumps and surprises along the way. Keep an open mind and prepare to be flexible. By setting your expectations appropriately, you’ll be more likely to enjoy your homebuying journey and make savvy decisions along the way.
5. Forgetting to budget for your purchase
Buying a home doesn’t always require a lot of cash. However, you should make sure you have enough funds for your purchase. Generally, you can expect to pay 0% to 20% of the home’s price as a down payment and 2% to 5% of the price in closing costs, although special mortgage programs may allow you to reduce these amounts. Speak with your loan officer and real estate agent to determine just how much cash you need for your homebuying plans.
6. Skipping the home inspection
You should always have a home inspected before buying it, even if the home is brand new. Don’t skip this critical step just because you’re in a hurry to buy or want to save the cost of hiring a home inspector. Having a home inspected gives you a much better chance at catching hidden and costly issues with the home before you make your purchase. If your inspector discovers any problems, you can ask the seller to fix the issues, request a credit on your purchase or walk away from the deal.
Conclusion By looking out for these common mistakes, and by working with a trusted real estate agent and loan officer, you’ll be well on your way to a rewarding home purchase. If you or someone you know would like to get preapproved for a home loan, we’re here to help!
