Buying a home can seem like an intimidating process. However, with the proper knowledge and guidance from someone who has been there before, it’s not as difficult as you may think. Here are some of the most common mistakes first-time homebuyers make and how to avoid them!
1. Don’t buy a home that’s too expensive for you
Buying a home is more than just a place to live. It’s an investment in your financial future. If you don’t think that you have the means to buy a home, then it may be better for you to rent in the meantime. A mortgage loan officer can help you build a plan so that you aren’t stuck renting forever.
2. Make sure your credit score is high enough to qualify for the loan amount
You will want to get your credit pulled by a loan officer to know what kind of mortgage you are eligible for. Your credit score could be the difference between being able to buy a home or not!
It’s also essential that your credit score is high enough to make sure that the loan program you qualify for is still affordable. Often, you may be able to get approved, but the rates are much higher with adverse credit and could make your monthly payment too expensive.
3. Get pre-approved before you start looking at homes
Make sure to get pre-approved before you start your home search. It’s a lot easier to find the home you want when you know your exact budget. You also don’t want to be stuck in an offer without being able to back out if you can’t get financing or something else goes wrong with the deal later on.
4. Know what kind of mortgage rates are available and which one will work best for you.
Don’t wait until you start your home search before finding out the numbers. Often there are “teaser” interest rates online, but they are for the highest qualified type of borrower. Generally, it’s much more expensive than they advertise. Do your research ahead of time, so you know what kind of rates are available to you and which one will work best for you.
5. Find out how much it will cost to insure the property in case of fire or other disasters
An expense that most homeowners don’t budget for is homeowner’s insurance. “It’s a major cost, and it’s something that most people don’t realize until they’re in the middle of shopping for their mortgage,” says Turnquist.
Insurance rates vary by location, type of property, age of the building, or other factors, so you’ll want to do some investigating before signing on any dotted lines. This will protect you in case of damage to your property, such as fire.
It’s never too early to start researching your options for buying a home. We recommend getting pre-approved before you even begin looking at houses and that you look into the different mortgage rates available to find out which one will work best for your budget and timeline. Click here to get started today with getting pre-approved.