Buying a home for the first time is a much more in-depth process than many buyers think. Many first-time home buyers jump in with both feet before realizing the steps that they should take to find their dream home. Take a look at some of these home buying mistakes you should avoid while searching for your new home:
There’s more to it than the mortgage:
Many first-time buyers only take into account the mortgage payments on their new home when deciding on the payments they will be able to make. Keep in mind that your mortgage does not include your association fees, utility bills, property insurance and maintenance costs that come with owning a new home.
Loan first, home second, not vice-versa:
Unless you are able to pay cash for your first home, you are going to need a loan. Many first-time buyers make the mistake of searching for homes before they get prequalified for a loan. The downside to this approach is that many people begin searching for homes before they know how much loan they will qualify for. This makes searching for a home much more stressful, and even emotional if you find out your financial situation is not as strong as you thought it was.
Investing in an agent:
Often first-time buyers want to save money and avoid hiring a real estate agent. However, when you deal directly with the broker selling you a house you’re interested in, they are just going to show you everything you need to do in order to own that specific home. Without an agent, you are eliminating many options for homes that could better fit your criteria and budget. Investing in an agent who will give you independent advice is crucial, especially since this is one of the biggest investments of your life.
Save for rainy days:
Purchasing the home of your dreams can be expensive. However, many first-time home buyers make the mistake of putting 20% down to avoid paying for mortgage insurance. In the long run this can cost new home owners their entire savings. So although you may want to avoid mortgage insurance, you should always keep enough in your savings for unexpected emergencies.
Hire your own inspector:
Most first-time home buyers think that once their offer has been accepted and a closing is in the near future that their new home is ready to go. However, your new home must always be inspected for safety prior to moving in. Inspectors will look at everything from electrical work, to the HVAC systems, to your foundation and flooring. Make sure that you hire your own inspector instead of one recommended by your agent to stay away from conflicts of interest. Your contract should also include that the previous owners pay a specific amount towards any repairs so you can avoid any additional costs.
There are many different contingencies to plan for when you are ready to purchase your first home. Make sure you avoid these common first-time home buyer mistakes so your house hunting journey can be fun and exciting instead of stressful and expensive.