As a first time home buyer, you’re probably excited about what’s ahead of you. It’s normal to be eager to find something as fast as possible in order to start your new life as a homeowner as soon as possible.
However, it’s also easy to find yourself making common mistakes if you’re not careful. The good news is that by learning from people who have made these mistakes before you, you can hopefully avoid them altogether. Take a look at some of the most common first-time homebuyer mistakes that you should steer clear of at all costs.
Not Getting Preapproved For a Loan First
A lot of eager couples start looking around at homes that they don’t even know they can afford. Before you even bother getting attached to the home of your dreams, make sure that you can actually afford it.
It’s important to get preapproved for a loan so that you know exactly how much you’re working with. Don’t forget that you will also have to pay for other expenses like housing costs, insurance, and property taxes. Factor in all of these costs, and only look at properties that are realistic for your budget.
Not Paying Off Debt First
If you try to get financed for buying a home with a considerable amount of debt under your belt, then you’re not likely going to get many offers. Before you even consider putting yourself into more debt, you should eliminate the debt that you already have.
You’ll find that you’ll get much better rates, and you’ll have more money to spend on things that truly make you happy, rather than straight from your paycheck to pay off debts.
Not Saving Up For a Down Payment
Most people can admit that they love spending money more than they do saving it. It’s easy to tell yourself that you will rely on a loan to pay for the cost of a home you want to buy. The problem with this is that without much of a down payment, you’ll end up paying much more over time, and likely won’t qualify for desirable interest rates.
Even though it may seem ideal to use the money you’re making now to spend as you please, the truth is you’ll get much more out of it if you put it aside for a downpayment on your house.
They Forget Closing Costs
One of the biggest rookie mistakes is forgetting that a sale also includes closing costs. You should count on paying as much as 4% of the total cost of your home. That means a $350,000 home will cost you up to $14,000 in closing costs.
Don’t forget to factor this in when looking at your budget, or you’ll be in for quite a surprise!
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