Buying a home is often referred to as the biggest purchase (and investment) someone will make. If you’re in the market for your first house or you think you’ll be ready in a few years, it’s just as important to know the common mistakes to avoid as it is all the helpful tips.
Buying a home doesn’t have to be anxiety-inducing — while there are many things that can’t be planned for, remember that knowledge is power, and the more you know, the more protected you’ll be throughout the process. Here are 5 of the most common first-time buyer mistakes and how to avoid them.
5 mistakes of first-time homebuyers
It’s not uncommon for there to be a few mishaps throughout the home purchasing process, but there are some pretty clear red flags that many first-time buyers often overlook or don’t even know to look for. Here’s how you can steer clear of avoidable issues:
- Not saving enough: It’s easy to get excited and let emotions take over, but that excitement can dissipate quickly if you find that you don’t have the budget to maintain your new home. Many buyers save enough for the minimum down payment. This can cause higher mortgage payments. Additionally, you’ll want to factor in closing costs, maintenance, and moving costs into your budget. Start saving as early as possible and aim to have a cash reserve of three to six months of living expenses.
- Not getting prequalified for a loan: Don’t get distracted by the “estimated monthly mortgage loan amount” numbers next to your dream home on Zillow. Take some extra time to speak with a mortgage loan officer and submit documents that can give you a realistic look at what you’ll be paying. You should also ask your mortgage lender about first-time home buyer options and look for programs in your state.
- Not checking credit report: Remember how we said knowledge is power? Get clear on your credit score and address any errors if possible before you even think about shopping around for homes. Mortgage lenders will take a very good look at your credit reports, and you’ll want to put yourself in a position to receive a better quote. You can avoid problems by requesting free credit reports each year and then disputing any errors.
- Settling or rushing the process: It’s easier said than done, but practicing patience is essential for first-time homebuyers. It can be easy to rush through or convince yourself a property is better than you really think it is. Take your time and make sure you consider every factor before putting down a deposit. This could help you avoid an expensive mistake! Pro tip: Spend a night in your potential new neighborhood to get a look at what life is really like. Check for Airbnb or VRBO in the area to test it out.
- Skipping or not going to home inspection: There are tons of horror stories out there of first-time homebuyers who opted out of a home inspection, and the outcomes could be devastating. Many home experts say that a home inspection is “the most important fact-finding process of purchasing a home.” This could uncover things like mold, poor plumbing, and more! So hire a professional home inspector and attend the inspection if you can.
Being aware of these common mistakes shouldn’t scare you away from the home-buying process; rather, it should empower you to know that you are making the smartest and safest decision for yourself and your family. Keep these tips in mind as you start looking for your first home, and you should be golden!
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