Purchasing your first home is an exciting time, but it can also be a bit daunting. There are a lot of things to think about, and if you’re not careful, you could make some costly mistakes. In this blog post, we will discuss five of the most common first-time homebuyer mistakes and how to avoid them. So if you’re in the market for your very first home, read on!
1. Not Getting Pre-Approved for a Mortgage:
It’s important to get pre-approved for a mortgage before you start shopping for homes. This will give you an idea of how much you can afford to spend, and it will also show sellers that you’re serious about buying. Getting pre-approved is completely FREE and this is a step you don’t want to skip.
2. Shopping Outside of Your Price Range:
It’s easy to get caught up in the excitement of home shopping and start looking at houses that are way out of your price range. Remember, you’re not just buying the house, you’re also responsible for things like mortgage payments, insurance, taxes, and repairs. Stick to properties that you can realistically afford.
3. Not Knowing Your Credit Score:
This is one of the biggest mistakes first-time homebuyers can make. Your credit score is a three-digit number that lenders use to assess your riskiness as a borrower. The higher your credit score, the more likely you are to get approved for a loan with a low-interest rate. And the lower your interest rate, the more money you’ll save over the life of your loan. So before you start shopping for a home, have a trusted mortgage lender pull your credit report and check your credit score. If it’s not as high as you’d like, there are steps you can take to improve it. Then, when you’re ready to start the loan process, you’ll be in a much better position to get the best possible deal.
4. Draining Your Savings:
With the rising cost of living, it’s tempting to deplete your savings account to buy a home, but this can lead to financial trouble down the road. Not only will you have less money for emergencies, but you’ll also be more likely to miss mortgage payments if you experience a sudden loss of income. Instead of draining your savings, try to save up for a down payment and closing costs prior to buying a home. This will help you avoid going into debt and will give you some financial cushion in case of tough times. If you’re not sure how much you should save, talk to a mortgage lender.
5. Miscalculating the Hidden Costs of Homeownership:
There are a lot of costs that come with owning a home that you don’t necessarily think about when you’re buying, such as property taxes, insurance, maintenance, and repairs. Make sure you factor these costs into your budget to avoid being caught off guard down the road.
So, if you’re in the market for your very first home, congratulations! This is a huge milestone. Just make sure to avoid these five mistakes and you’ll be on your way to homeownership bliss.
Have more questions? Send me an e-mail at edavis@guildmortgage.net. If I can’t help you out directly, I’ll point you in the right direction so that financing your dream home is a breeze!
