Buying your first home is an exciting time. It’s one of the biggest financial transactions a person can make, and oftentimes, it’s easy to feel overwhelmed and stressed out about all the decisions involved throughout the process. But don’t let that stop you from feeling overjoyed! Here’s a list of the top 6 mistakes you’ll want to avoid making as a first-time homebuyer.
1. Buying More Than You Can Afford
Banks may offer you a larger mortgage than you can afford. It’s important to keep your personal budget in mind and make sure you’re comfortable with borrowing the amount you’re borrowing. Make a list with all of your existing monthly expenses, including the following:
Credit card payments
Student loan payments
Keep any yearly expenses in mind, such as vacations. You don’t want to forget anything in your budget. Next, subtract this amount from your take-home pay and this will give you what you have available for a mortgage. Take a look at current interest rates to figure out what your total payment will be.
2. Failing to Get Pre-Approved for a Loan
This is an important step that many people forget before they place an offer on their dream home. You might think you’ll be able to afford a certain amount, then find out the bank isn’t willing to lend you that. When this happens, you miss out and often end up disappointed after finding the perfect house.
Keep in mind, if you do get pre-approved for a loan, you don’t want to make any drastic changes to your financial situation. Don’t change your employment, incur any new debt or take out any other loans. You don’t want your loan to fall through once you’re ready to put an offer in.
3. Not Being Flexible with Your Wish List
We all have our “wish list” when it comes to finding the perfect house. But sometimes, if you’re too picky, you miss out on great homes that fit the majority of your criteria. Try to be flexible, especially if your funds are limited. You might have to live without a few things if you want to stop renting in the near future.
Alternatively, you can continue renting until you do find everything you want, but sometimes, it’s easier to buy and make changes than it is to wait until you find something that checks off every item on your wish list.
4. Making Compromises You Shouldn’t Make
Yes, you shouldn’t be too picky, but that doesn’t mean you should make compromises on things that are important to you. If you’re planning to have kids in the future and you find a 2-bedroom house that’s perfect aside from missing a couple of extra rooms, don’t compromise. Wait until you get the home that makes the most sense for you.
Small things can be ignored, but there are certain areas you shouldn’t compromise. This includes choosing an apartment over a house because it’s cheaper. If you know you’re not a fan of apartments and it’s going to make you uncomfortable to have neighbors on the other side of the wall, wait until you find a home.
5. Neglecting to Schedule an Inspection
You might be really excited to put an offer in and get your keys. But wait… Don’t forget the inspection! This is such a critical part of the entire home buying process. You don’t want to fall in love with a home, have your offer accepted, and move in - only to find there’s a whole host of issues.
Make sure you’re scheduling an inspection so you know exactly what kind of shape the house is in. Buying a home is a major investment and you don’t want to find yourself stuck with a money pit. Check out our blog - a complete buyer’s guide to home inspections.
6. Going Without a Real Estate Agent
Sure, there are benefits to going through the home buying process without a real estate agent, but as a first-time homebuyer, a good real estate agent will be invaluable to you. They’ll have insight into the neighborhood - from ensuring you’re not overpaying to giving you information on upcoming developments or other factors that may impact the value of the property.
In addition, a good real estate agent has experience with negotiation and contracts - two things the average first-time homebuyer doesn’t usually have much knowledge about. This will help you get the best possible deal. Read our blog on 4 reasons you need to hire a real estate agent for more information.
Ready to buy or sell? Click here to contact us, give us a call at 757-350-1149 or send us an email at firstname.lastname@example.org to start planning your next move now! I’m here to answer any questions you may have about your real estate goals.