After months, perhaps years of preparation, you’ve decided to buy that first home, congratulations! This will be a fascinating time for you, but wait; it’ll be essential to never let the hype of the moment to interfere with making significant decisions in the whole process. The dream of homeownership is beautiful and challenging at the same time, so don’t worry, there will be plenty of solutions for you to choose from.
Before going far into the deep stuff we are about to discuss in this article, let us remind you that the help of a professional is always recommended in these cases, realtors are there to help you out with successful methods that can bring amazing outcomes to the whole effort. Well, let’s go forward to the most common faults that first-time home buyers keep making, pay attention.
1. Buying First, Applying for a Mortgage Later
Most first-time homebuyers make this mistake simply because they see the homes before requesting a meeting with the mortgage lender. This way, they are left without the house. The reason? Sometimes they’ll be unable to pay the mortgage costs.
Competition in this market is fierce when it comes to first-time purchases, as you may be tempted to stretch your budget and thus lose the property of your dreams, all because you don’t have the prior pre-approval you need from your mortgage lender. So, make sure you have this document right on time.
2. Getting Emotional
The best decisions you can make when buying a home are those based on real facts. Too often we see buyers making an offer on a home they like, and later knowing that the house is being sold to someone else who offered more money, getting demoralized in the attempt. That is one of the hardest things to hear as a buyer, especially if this is your first time.
3. Why Only One Lender?
Buyers most of the time can obtain the loan from a single lender or bank without seeing all the options that the market has to offer.
If this is your particular case, it is recommended that you compare at least three different lenders in order to see all the options, fees, closing costs, and down-payment opportunities. Both parties play a vital role in the purchase of a home, and you need to get the most out of this instance.
4. Not Calculating Expenses
when you start shopping for homes, it is a good idea to understand your finances down to the finest details. Determine what you can afford to pay every month, taking into account your current income and expenses.
Your home payment each month should not go over 30% of your monthly gross income. Take into consideration what your current mandatory monthly expenses are, these include car payment, credit card minimums, any court fees, and other loans such as student or consolidation loans. If you have high monthly expenses compared to your gross income, this 30% number for your mortgage payment should be even lower.
5. Ignoring Closing Costs
In addition to the inspection, buying a home involves other costs that are added to the down payment, and those can be substantial. These expenses, which include attorney’s fees (if applicable) and title insurance, are paid when you sign the final documents. Typically, total closing costs are 2% to 5% of the home’s purchase price, so you should add these numbers to your budget. You can use a closing cost calculator to better understand the total amount of money you will need.
Sometimes by wanting to save a few bucks, we end up taking the worst decisions that will make us pay even more to solve these mistakes. Remember that looking out for a competent real estate agent will help you get the best results. At AFTHA we focus on you, in order to avoid these errors. We provide the most exceptional protection on your first purchase, with the immediate availability of all our best consultants, making your experience totally unique. Want to know more? Contact us now!