If you’re a first-time home buyer, you’re probably surfing the internet trying to grasp as much information as possible, as you should; and rightly so, you need to avoid first time home buyer mistakes.
Buying a home is a big deal, but buying one for the first time is a bigger deal. If you’re buying your first home then you already know that it can be a scary-sweet experience.
While you’re excited about the idea and reality of owning your own home in the nearest future, you’re also scared of facing the realities in the market and the stress that comes along with facing the real estate world. One thing you need to watch against is getting carried away by the less important things like shopping for home items forgetting more important things like the main process of buying the house. Doing this will only lead to you make one of the costly first time home buyer mistakes.
Knowing the pitfalls, arming yourself with knowledge, and asking questions are important steps to avoid making first timehome buyer mistakes. Also, reading this article will give you a good idea of what they are, that way, you will be able to easily avoid making them.
Below are some mistakes first-time home buyers make. Hold on to them tight if you’re also looking for first-time home buyer Arizona tips.
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Ignoring mortgage
One of the mistakes first-time home buyers make is not getting their mortgage preapproval before going to approach the house seller.
This is a mistake because picking a home without discovering which kind of home your budget allows you to pick first will be the same as putting the cart before the horse. So, before falling in love with your dream house and getting emotionally invested in it, ensure you get the necessary documents – an underwritten preapproval. This also demonstrates to the seller that you are a serious and capable buyer.
Also, when trying to get a mortgage, do not talk to just one lender. Try to talk to different organization and go through their rates.
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Going above your budget
This is one of the mistakes first time home buyers make. This usually happens because it is easy to fall in love with a house that has price tag and mortgage payments that your level of income may not be able to keep up with.
This is a huge mistake especially in the long run because you’re at risk of foreclosure if you ever fall on hard financial times. This will affect your finances and can severly impair your standard of living.
Taking a home loan out on the full loan amount you qualify for is hardly ever a great idea. Just because you qualify for it does not mean it is wise for you financially. You must factor in your other expenses and see if you can really afford it.
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Rushing through the process
Rushing is never a good idea; especially when buying a home.
This is one of the mistakes first time home buyers make. You need time to plan and fix your credit report to help you qualify for better loan terms.
You also need time to save up enough down payment for the house. Pouring out savings that you had other plans for, because you want to “move fast” in the home buying process is hardly ever a good idea either.
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Credit report discrepancies
Before and after preapproval, your mortgage lender will go through your credit report and they can easily identify new loans and credit cards. This can threaten your final loan closing or approval.
During this period, ensure that you’re not acquiring the burden of new loans. Maintain a clean slate from the beginning till the loan is closed.
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Failing to take a holistic view
Many first-time home buyers usually focus on the house they want to buy only. They focus on the cosmetics of the house and fail to look at equally important things such as the neighborhood in which the house is situated.
The neighborhood is almost as important as the house itself, and many first-time home buyers don’t pay attention to this.
This is one of the first time home buyer mistakes to avoid.
Ask about the neighborhood, the schools, commute time, traffic, and so on. You want to be sure it’s a place you’ll be comfortable and happy to live in.
6. The 20 percent down-payment myth
Additionally, believing the 20 percent down payment myth is another of the mistakes first-time home buyers make.
Most people assume they have to wait until they have saved up to 20 percent for a down payment before they can buy their house. While this is true for some communities, it is false for most.
In fact, according to the National Association of Realtors, the median down payment on a home is 12 percent, and 6 percent for first-time buyers. Knowing about these mistakes ahead of time, helps you avoid making them.
What mistakes did you make when buying a house for the first time?
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