Buying a home is an overwhelming task. With all of the boxes that need to be checked, it can be easy to make costly mistakes. However, by understanding the process, you can avoid the potential pitfalls that most people make. Here are some costly mistakes first-time home buyers make.
Consulting With Only One Lender
It is very important to meet with your mortgage lender before starting the homebuying process. This can be very helpful and insightful especially if you are new to the process. This will educate you on just how much home you can afford. You can learn all the possible extras that come with a house payment such as home insurance and possible HOA fees. – and learn how some of these can actually be rolled into your payment! It is important to feel comfortable with your monthly mortgage payment. Your expert TMSI loan officer can help you get ready for the entire process. .
Borrowing Too Much Money
When consulting with lenders, they’ll let you know the amount of loan you qualify for. Some lenders may be willing to offer you a significant amount of cash. Be careful not to take on a huge debt just because you discover you qualify for a larger loan. Always stick to your budget. If you plan to buy a house worth $250,000 and the bank is offering you $350,000, no need to change your budget. Always stick to the amount that will not strain your monthly budget.
Buying a Home in the Wrong Neighborhood
It’s important to find a neighborhood that suits your lifestyle. Don’t just jump on a home because it looks great if it’s in a town that doesn’t meet your needs. Visit the neighborhood and walk around. Check out parks, events, schools, and commute times, among other things. You can even book an Airbnb and spend a couple of days in the neighborhood just to get a feel of what your daily life might look like in that place.
Not Checking Your Credit Report
Your credit score will determine whether you secure a mortgage with the best rates. Start working on improving your credit score to help you secure great rates. In addition, examine your report to ensure it doesn’t have mistakes that can affect your score.
Not Checking a Home’s Renovation History and HOA Rules
One of the most important steps in buying a house is scheduling a home inspection. It helps you understand how a home was constructed and any underlying issues that can be a problem in the future. Confirm that recent renovations were done by a skilled contractor because shoddy craftsmanship can lead to costly repairs down the line.
In addition, look into HOA laws as they can impact any future renovations, the types of pets you own, where you park your car, etc. Some of these rules can be deal breakers, and it’s better to know about them early.
Ignoring First-Time Home Buyer Assistance Programs
There are federal, state, and municipal assistance programs that can help you buy a home. Some are for low-income buyers, and others for under-represented socio-economic communities. Check out housing assistance programs you qualify for, as you might save some money.
Forgetting to Save for Closing Costs
There are additional costs beyond that of buying a home. You’ll encounter escrow fees, title insurance fees, transfer stamps, loan origination fees, property taxes, survey fees, etc. Don’t forget the moving fees and home repairs, which can accumulate quickly. Budget for such fees as well.
Knowing which mistakes to avoid can help you make the right moves in this first-time home-buying process. Remember, purchasing a home is more than a financial investment. Take your time, research, and don’t hesitate to seek professional advice when needed.
