Are you a first-time homebuyer? If so, navigating the process can feel overwhelming. If you want to make your buying experience much more seamless, it’s important to know what not to do when preparing to purchase a home. Today we’re going to talk about the top first-time home buying mistakes you should avoid.
First-Time Homebuyers Mistakes to Avoid
First-time homebuyers have a lot of decisions to make along the way. As such, it can be difficult to navigate which decisions best support your needs.
If you want to make your home buying process as seamless as possible, it’s important to arm yourself with the right information to help you make as few mistakes as possible. To help improve your buying experience, we’re going to share 5 mistakes first-time homebuyers should avoid.
Looking for a Home Without a Pre-Approval
When you first decide to purchase a home, it’s easy to fantasize about your dream home. Many first-time buyers spend a ton of time online looking at listings without getting a pre-approval letter from a lender.
This is a mistake that first-time buyers need to do their best to avoid. This is because looking at homes without knowing how much you’re approved for can waste a lot of time lead to false expectations of what you can afford.
With that said, buyers must have realistic expectations of what they can and cannot afford for their new home. The last thing you want to do is find a home you love only to find out you can’t afford it later.
A pre-approval letter gives buyers an accurate depiction of how much house they can afford and gives buyers a focus area to not waste much needed time.
Not only that, but a pre-approval letter shows sellers that you are a serious buyer, enabling you to get your dream home. This is especially important if you’re in a competitive market.
Not Getting More Than One Lending Quote
Another big mistake that many first-time buyers make is not exploring multiple lenders. Too often, first-time buyers will apply for a loan and go with the first lender that approved them.
While it is exciting to get a pre-approval from a mortgage lender, you will be doing yourself a disservice by not exploring multiple lenders.
It’s important to remember that mortgage lenders aren’t one-size-fits-all. This means that each lender will likely offer different rates and incentives. It’s up to you to determine which lender best suits your needs.
Another option is opting to work with a mortgage broker, who will bring their experience to the table and work with you to find the perfect lender.
Not Exploring Multiple Loan Options
Another way first-time buyers limit themselves is by failing to explore multiple loan options. A conventional loan is the most popular type of loan option. However, it isn’t the only option available to first-time buyers and isn’t always the best option either.
Before assuming that a conventional loan is the best choice for you, it’s important to explore other loan options such as FHA and USDA loans. Both loan options have great incentives that can benefit first-time buyers.
Once you’ve explored all loan options you qualify for, choose the one that fits your needs best.
Not Checking Your Credit Score and Credit Report
Your credit score and credit report are key to securing the home of your dreams. However, many first-time buyers fail to check their credit score and thoroughly check their credit report before applying for a home loan.
This is an important step in the process because one small issue can prevent you from qualifying for a home loan and are often fixable.
With that said, always know where your credit stands before applying for a loan. The better your score is, the better rates you will have. In addition, be sure to take some time and review your credit report. You might find inaccurate information on your report that can prevent you from obtaining a loan.
Ignoring the Entire Cost of Homeownership
Getting an affordable mortgage is only half the battle. To truly know whether you can afford a home, first-time buyers will need to examine the total cost of homeownership to ensure they can afford to buy a home at this time.
Ultimately, being a homeowner is a great experience. But it’s even better when you can afford the home you’re in. With that said, don’t forget to consider closing costs, insurance, property taxes, utilities, maintenance, and HOA fees.
These are common fees associated with homeownership, and first-time buyers will need to ensure that they are prepared to cover all of these costs to alleviate stress.
We know that buying your first home can feel overwhelming, but it doesn’t have to be. There are various aspects of homeownership that first-time buyers need to consider, but being prepared will simplify the buying process and make you feel more confident in your purchase.