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Buying your first home is a fantastic achievement and brings much excitement. However, the stakes are high, and any misstep can soon become costly! Here are a few things to watch out for
- NOT HIRING AN AGENT
A real estate agent can be a valuable ally when buying your first home.
However, it’s tempting to skip hiring one in order to avoid paying their fee. But, a good agent will more than cover their cost by negotiating the best prices and helping you avoid other costly mistakes.
Be sure to do your research and hire an agent that is right for you. It’s well worth spending some time talking to and interviewing several agents to ensure you find one you’re comfortable working with.
- NOT GETTING MORTGAGE PRE-APPROVAL
During the pre-approval process, lenders will review various financial information, such as your credit report, income and tax history. With that data, they’ll let you know the maximum loan amount you qualify for.
Armed with this figure, you can then search for homes within your budget.
As a bonus, pre-approved buyers are always much more popular with sellers, as it shows you’re serious about buying.
- SKIPPING THE HOME INSPECTION
While it might be tempting to save a few hundred dollars by skipping the inspection, it’s almost never worth it. Home inspections protect the buyer and let them know about any potential issues the home you’re prospecting has.
Without one, you could easily buy a home with severe structural problems and safety concerns. And once you own the house, it’s down to you to fix them, which can be extremely costly.
- TAKING YOUR EYE OFF OF YOUR CREDIT REPORT
Once pre-approved for a mortgage, you might think you can relax regarding your credit. However, lenders will conduct further credit checks before officially underwriting your loan.
If you haven’t taken care of your credit in the interim, you can easily fall at the last hurdle, losing out on your dream home and any cash you’ve already paid out.
The easiest way to avoid this mistake is to maintain the status quo. Don’t take out any new lines of credit or close existing ones.
The main thing is to ensure your debt-to-income ratio remains the same. In other words, don’t go buy a new car, or furniture, or appliances or ANYTHING while you are house hunting!
- NOT CONSIDERING ALL OF YOUR OPTIONS
Overcoming the #1 Obstacle
Lack of a down payment shouldn’t keep you from owning your own home. Over 2,600 programs in the U.S. help with down payment and closing costs. Unique platforms connect buyers with knowledgeable professionals and the money they need to become homeowners.
It’s well worth seeing if you qualify for one of the many first-time buyer schemes available to new homeowners. These are called “down-payment assistance programs”. With many, you can earn up to $125,000/year and still qualify! Make sure your agent knows the ropes.
While they tend to differ from place to place, they can really ease the financial burden of buying your first home.
For those who don’t qualify for a conventional loan, it’s also worth knowing that there are other loan types available, such as FHA, VA and USDA loans (U.S. only), bridge loans, rent-to-own, and private loans.
- LETTING YOUR HEART RULE YOUR HEAD
It’s all too easy to get overwhelmed and fall in love with a house or a neighborhood!
You fall in love with the favorite neighborhood that’s really over your budget so you go into a “fixer upper”. Then you will spend your money AND your time fixing it up. This is rarely a good choice for a first timer!
Or, if buying your dream home will stretch your budget to the max, it can soon become a nightmare as you struggle to pay the bills each month. Likewise, a poor location can severely impact your quality of life.
These are just a few of the things to consider. Remember, for most people, your home is the most expensive thing you will every buy . Anything that take 15-30 years to pay off is huge and deserves the best people to provide you with guidance and sound advice. And, when you’re ready to jump in, call me. With 32 years as a Texas Realtor, experience isn’t expensive, it;’ priceless!
