Try to avoid these common mistakes that first time home buyers make.
It’s time! You’ve decided to step up in the big world and become a first-time home buyer! However, purchasing a home is not similar to when you were 5 years old, and you were about to buy your very candy bar. Acquiring your very first home can be either the smoothest transition of your life, or it can be the most stressful event in your life. Many mistakes can pop up during the process, but here are 5 of the most common mistakes that were made by first-time home buyers, and how you can avoid them when your time comes.
1. Not checking your credit report and score – Your credit report and score can and will make a drastic impact on your interest and approval rate. So before you dive right into the home buying experience, take a good look at your credit score and report. We understand, checking your credit score is the same as checking how much money you have in your account. If you don’t check at all, then it must be a good number, and you are afraid of the actual number! However, if you don’t know your score, that number can hurt you. If it isn’t up to date or it is a bit low, you can make some changes to it before you start the home buying process and you will have a good idea what you can expect in the long run. So remember: take advantage of your annual free credit report and give yourself an idea of your credit score and history before it bites you back.
2. Not getting pre-approved – Yes, we’ve talked about being pre-approved a lot and the benefits of a pre-approval VS. not having a pre-approval, but we might as well mention it here on our list as well. Say it with us, “I want to get a pre-approval!”
3. Failing to create a long-term budget plan – Remember the housing crisis back in 2008? That was a time in history where mortgages were granted to people who couldn’t afford to pay the banks back. Why is that? People didn’t know about the long-term cost of owning a home and didn’t “budget” enough for the future. So to prevent a repeat of 2008, you should create a budget on how much you want to spend for each monthly cost before you dive right into the process. A good rule of thumb is trying to devote a third of your monthly household income to your mortgage payment that includes taxes and insurance. Remember to put money away for the long run as well for life’s little mishaps, like replacing a furnace or fixing a water leak that can lead to a mold issue.
4. Not hiring the right agent to help you – Let’s face it, buying a home can be a long, confusing, and anxiety-ridden procedure anyone will make, especially first-time homebuyers! That is why you would want to find an agent who will be a perfect match for you and your purchase situation. You’re going to want an agent you feel comfortable with to ask questions and help you from the start to the end. Some agents specialize in first time home buyers and other specialties like the
type of homes you are looking for or finding the kind of loan that’s right for you.
5. Not considering the overall value of your home – First-time homebuyers treat their first purchase as their “happily ever after” storybook ending.However, life is also known to throw you a curve ball that could require you to move to another location. What if your job needs you to transfer to another state, or your growing family happens to be growing more than expected, or worse, decreasing? When you purchase your first home, consider the re-sell value of the house. One of the most overlooked items is the neighborhood. Even if raising a family isn’t on your to-do list, the property value of the home are higher in communities with a good school district compared to those that are not in more hot areas. The number of bedrooms and bathrooms will also drastically affect the overall value as
well.
First-time home buyers very commonly make these 5 mistakes. Fortunately for you, you can learn from their mistakes and try to tiptoe around them. Make the time you dedicate to purchasing a home be as smooth and comfortable as possible.
