Mistakes a First-time Homebuyer Makes

by | Jan 1, 2020 | Realtor Services

Purchasing your first property comes with a lot of huge choices. While it can be exciting, it can also be frightening.

That’s why having a lot of knowledge helps, whether it has been a lot of years since you last purchased a house or whether it’s your first time buying a house. To help you with your real estate endeavor, here are several mistakes that you should avoid.

Draining Your Savings

One of the major mistakes that first-time homebuyers do is spending most or all of their savings on the closing expenses and down payment. A couple of individuals spend every single one of their cash to pay for the 20% down payment so they do not have to pay for mortgage insurance. However, since they’re left without any savings, they’re doing the wrong move.

Moving Too Quick

Purchasing a house can be complicated. This is particularly true when you are in the mortgage process. However, if you rush the process, you’ll end up spending more money than you should.

Not planning enough ahead for their purchase is one of the major mistakes that a first-time homebuyer makes.

If you rush the process, you may end up not saving enough money for the closing expenses and down payment, make informed choices, or address items on your credit report.

Purchasing more House than You Can Afford

A lot of individuals fall in love with houses that may stretch their budgets. However, it isn’t an excellent idea to overextend yourself. You always have to keep in mind that the prices of houses are still increasing.

Purchasing a house that surpasses your budget will put you at a higher risk of losing it if you will have financial issues in the future. In addition to that, you’ll also have a hard time making a budget for your monthly expenses and bills.

Only Talking to a Single Lender

This is a huge mistake. A first-time purchaser may get a mortgage from the only bank or lender they first find. This will possibly leave a lot of money on the table.

An excellent mortgage loan officer can look at your case and examine any possible roadblocks in the future. This will provide you an obvious understanding of your choices for home-buying.

Looking for a House First Before Applying for a Mortgage

A lot of first-time purchasers make the mistake of viewing houses before ever talking to a mortgage lender. In a couple of markets, the housing inventory is still tight since there is more demand for buyers compared to affordable houses on the market. If you are not preapproved for a mortgage you can lose a house in a competitive market.

Being Inconsiderate with Credit

To ensure things check out, lenders will put credit reports at preapproval. They will also pull credit reports again before closing. Lenders simply want to ensure nothing has changed in your financial status.

Any new credit card accounts or loans on your credit report can risk the closing and approval of the final loan. Oftentimes, purchasers learn this lesson the hard way.