Are you buying your first home? You probably know that it can be an exciting, fun and yet overwhelming process. It is worth noting that from finding your dream home to knowing the amount you can afford, there are several factors that may end up leaving you more stressed and anxious than excited. If you are thinking about purchasing your first home, you might probably be wondering where to start.
Let’s get one thing out of the way. First time home buyers in the country make mistakes all the time. Perhaps they choose the wrong type of mortgage, pay too much, or neglect to properly budget for needed home improvements. Also, note that as buying a first home is an extremely emotional process, you may let your emotions get the better of you. As a result, you can fall prey to a number of common first time home buyer mistakes.
Your home is probably the biggest purchase you will make in your life, and no one wants to experience any regrets after making a big decision. So, make sure that you avoid these common first-time homebuyer mistakes.
Most homebuyers don’t talk to mortgage brokers or loan officers to get information on various kinds of loan products. You will be glad to know that there are mortgage loans for nearly every person and situation. Many first-time homebuyers in the US typically opt for a thirty-year fixed-rate mortgage. It is worth noting that their conservatism is often a reaction to stories about the perceived dangers of adjustable-rate mortgages and interest-only mortgages. However, the truth is that sometimes home loan alternatives to a thirty-year-fixed mortgage make more sense.
There are several types of home loan programs for buyers. Maybe a loan officer is pushing you toward a program that is not the best fit for your needs. You should speak to more people in order to get more information and choose the right type of mortgage as well as the lender. On the other hand, if you do not educate yourself on the various mortgage products, this will increase your risk of selecting a loan that is too expensive. Jumping into getting a mortgage product without doing the research is certainly a recipe for disaster.
Inspecting a home is essential before you buy it, but many first-time home buyers skip this step. And that is not all; some sellers may even rush the process or discourage an inspection. However, keep in mind that buying a home without an inspection is very risky. This is because serious problems may exist with the plumbing, electrical wiring, or the roof, etc. No one wants to get stuck with a money pit or with the stress and headache of performing many unexpected (potentially costly) repairs.
By hiring an inspector, you can identify these problems and complications before the closing, and then ask the seller to rectify these problems. Also, keep in mind that if you purchase a house and skip the home inspection, you will be financially responsible for any issues or problems that arise after closing.
As a first-time homebuyer, you are often very familiar with the cost of renting. These costs usually include monthly utilities, rent payments, and any internet/cable bills. However, as a homeowner, you will assume a bigger financial responsibility. After many first-time homebuyers purchase a home, the monthly bills often keep stacking up.
If you are not ready for it, this may come as a surprise. In addition to your monthly mortgage bill, you’ll have to budget for various property taxes, garbage pickup, homeowners insurance, and utilities. A new home may come with entirely new bills, like homeowner association fees.
And keep in mind that you are also responsible for the costs of home maintenance! This is why we recommend you to set aside 1-3 percent of the total purchase price of your home annually in order to cover repairs and maintenance.
You are probably thinking that you do not need a realtor in order to buy a house. However, before disregarding the significance of a buyer’s agent, keep in mind that the home seller’s agent has their client’s best interest in mind and not yours. They may offer you some advice and even answer your questions, but this person’s aim is to serve the seller. This is why you need to find your own realtor. Finding a knowledgeable and experienced real estate agent who has all your interests at heart is crucial for first-time homebuyers for several reasons.
After all, this person will help steer you toward your dream home. And you will likely have plenty of questions. A buyer’s agent will guide you in the right direction, counter an offer, help negotiate your bid, and also organize the closing process. And as the seller usually pays both agents’ commissions, it is sensible to have a professional agent on your side.
If you have just looked at a beautiful house for the first time and you are already imagining your children playing in the big and nice backyard, you may be too emotionally invested. We know that buying a home is a major life milestone for any person. It is a place where you will make memories, put down roots, and create a space that is truly yours. This why many buyers get too attached and end up making emotional decisions.
Keep in mind that buying a house is a business transaction. It is also likely the biggest purchase you’ll ever make in your life, so you should be clear-headed. As homeownership has several far-reaching implications, it is vital to keep your emotions in check and then make the most rational and suitable decision possible. You may end up paying too much for your dream home if the decision becomes emotional. So, step back, breathe and think critically.
Buying a home is a big decision, especially if it is your first time. However, it need not be the most difficult. By comparing various lenders, knowing all your options, and keep your emotions in check, you can avoid making some common mistakes. The more you know and understand the process, the easier it will be to avoid serious mistakes.