5 Mistakes to Avoid as a First-Time Home Buyer
- Apr. 7, 2020
- Yelaine Suarez
- Home Loans
In December, I got engaged to my boyfriend. After the initial shock and immediate wedding planning excitement, we both quickly realized we wanted to purchase a home that we can move in to after the wedding. I decided to start the research process early on to find out more information on which mistakes we should avoid, since after all, we are first-time home buyers and have never been through the process before. I found such great tips, that I wanted to share, and I hope you find them as useful and insightful as we did. Remember, owning a home is an exciting time and it could be an overwhelming investment, so make sure you do your research – be thorough, have fun with the process, and enjoy all the milestones. Being a first-time home buyer is an exciting time!
So, what are the 5 mistakes you should avoid? Let’s take a look:
Not determining how much home you can afford. I’m sure most people are guilty of this because I know I am! Before you even start looking for your dream home, you should figure out how much home you can really afford, so you don’t start the house hunting process shopping for homes that are above the price range that you can afford. For many first-time home buyers like myself, the end goal is to purchase a home and get a loan that will make your mortgage payment reasonable for you to pay each month. If you want to avoid the mistake of looking for homes that are well above you price range, use our affordability calculator to get a better idea of what you can really afford.
Assuming you’re ready. Just because you feel ready for a home and a mortgage, doesn't necessarily translate to being able to afford a home — there is a lot more to it. A home mortgage comes with property insurance, taxes, homeowner's association's dues in some cases, maintenance, and higher electric and water bills than you would be making in an apartment.
Shopping without a pre-approval. I'm guilty of this one, and you would think I would know better. I love to take drive around the neighborhood with my fiancé and just explore — if a home happens to be on sale in the neighborhood I take a flyer. What's wrong with this picture? Well, according to those who know, home buying doesn't begin with home searching, that's actually backwards! I know … I was thrown off by this concept too.
Ideally it begins with a pre-approval from a trusted mortgage lender. We – you and I – have to remember that buying a home should be a financial decision, not an emotional one, and by going to a lender and getting pre-approved first, it separates the two.
Not doing research for first-time home buyer programs. Many first-time home buyers, like myself may not be aware of the programs that are available. Do your homework and find which programs are available in the state that you are trying to buy in. These programs that are available may even offer down payment assistance to some home buyers, so it’s worth looking into.
Using up all your savings on a down payment. Sure, the idea of putting 20% down to avoid mortgage insurance sounds lovely, if you can truly afford it. If not, don’t leave your savings empty! You never know what can happen in the future for one, and if you're moving from an apartment to a home, odds are that you are going to need some furniture or a little bit of money to decorate your new home — I'll refer again to mistake number 3, don't live above your means. Find what you can afford and try to be below or slightly below your means, in other words play it safe, don't live on the edge! Plus, there are great programs out there where you don't need the 20% down! It all goes back to research, research, research.
So, are you ready to become a first-time home buyer? Contact us today to get started with the process!