Buying your first home is exciting! But without the right help, it can be overwhelming, confusing and stressful. Here are some common first-time homebuying mistakes – and how to avoid them.
1. Spending More Than You Can Afford
If you haven’t set up a monthly budget, things can spiral out of control when trying to purchase your first home. The costs you may not have had while renting can add up quickly. Things like power, garbage, and water are often overlooked when figuring out how much homeownership actually costs. To avoid this common pitfall make sure you can answer these two questions.
- What is your goal payment?
- If you find your dream home…what is the maximum payment you are willing to make?
Having a goal payment will help you narrow your search to homes that fit your budget. And while finding your dream home may not be the goal this time around, it’s important to know your max payment just in case you do.
2. Not Knowing Your Credit Score Ahead Of Time
A lot of people will head into the home buying or pre-approval process without knowing what their scores are. While websites like Credit Karma won’t have the exact same score as your lender it can be a good place to start. Knowing what’s on your report ahead of time will make the process way easier and get you started on the right foot.
If your credit score isn’t the best…don’t worry…your lender should have some tips on cleaning up your report which could save you thousands of dollars in the long run.
3. Getting Pre-Approved At The Last Minute
Many first-time home buyers are so excited to start looking at houses they forget to get pre-approved first. Often times this means being in a hurry to make an offer and ending up in a loan program that is not the best fit for you long-term. It is always worth comparing different loan options with your lender to see which one if one makes the most sense. While you may only qualify for a certain program, having the time to make adjustments to your credit and loan profile could save money in the long run.
4. Not Knowing What You Want In A Home
When homes are listed for sale they are set up to attract buyers so it’s easy to get into a beauty contest. But when deciding on your first place it’s important to also make sure it’s function and practical for your lifestyle. If you have pets make sure to decide if you want a yard in your new house or if you’re going to put one in. It’s also important to think of the things that take place in your every day life. Do you want the home you’re buying to improve your lifestyle? What does it need to have to make that happen? Also, think of other seasons when buying. If it is the middle of winter an air conditioner may not seem important. But imagine how you’ll feel when the snow melts and it’s 90 degrees outside.
5. Not Turning Paperwork In On Time
Turning in paperwork is the worst part of the process. However, it is one of the biggest factors in getting your loan to close on time. There will be several different times during the loan process where you will need to turn in or sign documents for your loan officer or realtor. Be sure that they are turned in promptly. This makes the entire process go smoothly and helps you get the keys on time.
6. Not Asking Enough Questions
Home buying can be overwhelming and in a lot of cases, the terminology can be confusing. The people you are dealing with (Realtors and Lenders) may talk about things that you don’t make sense. If that happens, stop them and ask for clarification. Not asking questions when you have them could cost you money or cause you trouble down the road. If you have any questions about the home buying process or how to get pre-approved we are here to help each step of the way.