5 Mistakes to Avoid as a First Time Home Buyer
January 6, 2016 | Shelby Hixen
Buying a home is one of the biggest steps of your life, and the home you purchase is one of the biggest investments you make. As such, you’ll want to be sure you go about the whole process in the best way possible. Unfortunately, if this is your first time buying a home, it’s easy to get lost during the process. There are a lot of new terms and things to learn about buying a home, which makes it easy to make mistakes that should be easily avoided. Some challenges you may face include things like finding the right home, getting approved for your mortgage, and staying within your budget. The stress from these challenges can also lead you to make mistakes. However, the more you know about these challenges and mistakes, the easier it will be for you to avoid them.
As you start looking for a home, try to avoid these five common mistakes that first-time home buyers make so the process goes smoother for you.
1. Thinking that your mortgage is the only factor into buying a home is one of the biggest mistakes you can make during the process. Most first-time home buyers start looking for a home once they feel stable enough to afford a mortgage. However, there is a lot more that goes into owning a home than just a mortgage. On top of the mortgage, you’ll pay property insurance and taxes, along with maintenance costs and homeowners association dues.
2. Not getting pre-approved for a mortgage before finding a home can lead you to a world of disappointment. A lot of first-time home buyers are afraid of getting prequalified. They don’t want to know how much—or how little—they may be approved for because that limits them to what house they can purchase. Of course, it is a lot more fun to go house shopping than sit in a lender’s office all day talking financial terms, but getting preapproved is a crucial step in the process. If you find a house that’s “perfect” and end up not getting approved enough to buy that home, the disappointment can be debilitating, and you may not want to expend as much effort into finding the right home for you and your family.
3. Finding the wrong agent or not having an agent at all can lead to a lot of frustration during your house hunting adventures. Agents have all kinds of insider information and knowledge about the houses you’re looking at and the process as a whole. However, you’ll want to make sure you hire a real estate agent that isn’t the listing agent. A listing agent will only sell you on houses that are part of their listings. A buyers’ agent will listen to your needs and find a home that fits those needs and budget.
4. Not having enough money for down payments and closing costs can destroy your chances of getting the home you want. And it’s not a good idea to use up your life savings to pay the down payment and closing costs. If buying a home leaves you without savings, you won’t have any savings set aside for rainy days when major house repairs need to be made. Every homeowner, even new homeowners, need to have rainy day funds available for use at any given moment.
5. Skipping out on the home inspection can be potentially disastrous for any new home buyer, especially when buying a waterfront property. Even though a home may look perfect on the outside, it could have a myriad of problems lurking behind those picturesque walls. Yes, a home inspection costs a little more, but it’s worth the price when you consider that unseen problems are the most expensive problems.
Do It Right
Knowing all about the challenges and mistakes you can make while purchasing your first home is the first step toward making the process easy enough to handle. Granted, you probably won’t ever learn all of the ins and outs of buying a home, but as you create a solid foundation, you will be sure to have a good first experience.