Buying your home is a big decision. Therefore, you have to be extra careful during the whole process. Even if you have enough capital, a wrong move can land you into a lot of trouble. When I decided to buy my new house the first time, the only lender that I contacted was rushing the process a lot. Luckily, I had subscribed to Cox TV Starter that enabled me to come across many property ads on TV. So, I contacted my other lenders and took an ample amount of time to make the right decision.
Speaking from experience, here are a few mistakes that every first-time home buyer should avoid at any cost:
Not Applying for Mortgage Before Viewing Homes
If you don’t get the underwritten preapproval before viewing a home, then you might not be able to buy a home at all. While it is a very appealing idea to view homes without contacting a mortgage lender, it is not a feasible one. This is because the house may have attracted several buyers already and preapproval is an indicator that you are serious about buying this house.
Approaching Only One Lender
This is the biggest mistake made by several first-time homebuyers. They talk to only one lender and bank before buying a property. Contacting more than one lender can enable you to compare different rates and deals. You can save a hefty sum in the long run by shopping around with different lenders and mortgage brokers. Therefore, compare rates, fees, and loan terms before settling on the right lender.
Going for an Expensive Home
You might fall in love with a house but it may be well over your budget. Ask yourself this question before proceeding with the buying process: Is it worth to spend all your savings on a single house? You might have to take a huge loan as well to buy your dream house. Moreover, if you get into any kind of financial trouble, then you might lose your house. So, it is a good idea to buy a home that you can afford.
Rushing the Process
If you rush the process of buying a home, you might not be able to save an adequate amount for closing costs. Buying a house is a complex process and you should make a plan and timeline in advance to avoid the extra costs. Doing so will enable you to save enough for down payments and improve your credit score. These, in turn, will help you to get preapproved easily.
Spending All Your Savings
Risking all of your savings on a single property is not a wise choice. While a 20% down payment can save you from mortgage insurance, but it can eat up all of your savings. Having no savings at all increases your chances of getting into financial trouble in the long run. Therefore, develop an emergency fund and save up to six months of living expenses in it before planning to buy a home.
Not Being Careful With Credit
If you want to make sure that the preapproval process runs smoothly, make sure that you don’t get any new loans or open new accounts before the process. Any such move can easily jeopardize your position and keep you from buying your dream home. So, don’t close any existing accounts and pay your bills on time to make sure that prove yourself as a serious buyer.
Not Selecting the Right Neighborhood
Selecting the right neighborhood is crucial for your family development. So, make sure that you visit several neighborhoods before buying a home. Buying a home just because it is pretty can prove to be a very bad decision in the long run.
This is because, you’ll not be able to live in your pretty house peacefully if the neighborhood is too loud, if it lacks basic amenities or if the neighbors are not friendly. So, always check the crime stats, school ratings, and transportation means of every neighborhood before making a choice.
Making Emotional Decisions
Buying a house is a difficult and emotional step. But it is important to have a budget and stick to it if you don’t want to get in serious trouble in the long run. Don’t buy a home just because you have fallen in love with it. Make this decision wisely and consider all pros and cons before bidding over a house.
Waiting Too Long for the Perfect Property
Waiting for the perfect home to emerge out of thin air is a stupid thing to do. Maybe you are expecting too much and your savings and loans are not enough to buy you that perfect home. So, lower your expectations and settle on a home that might have one or two flaws.
Another mistake that first-time homebuyers make is to select a neighborhood that doesn’t have the desired facilities. When buying my new home, my priorities also included living in a neighborhood where I had access to Cox Care for installation. That may sound small, but it was a big deal for us!