For many people, buying a home is a once-in-a-lifetime thing. As such, they become overjoyed at just the thought of purchasing their very own home. If you're on the journey to become a homeowner for the first time in your life, you can probably relate to this feeling. We're not saying that the enthusiasm is misplaced. You should definitely be overjoyed to finally have your own living space.
However, there are sobering realities that should temper your enthusiasm. Purchasing a home is a huge financial commitment, and for many the biggest one they'll make in their entire lives. It is hence, important that you be measured in all your decisions. If you make one of the many first-time homebuyer mistakes that are mentioned in this article, you could be looking at a cascading string of consequences that you could never have imagined.
First-Time Homebuyer Mistakes
Here is a list of mistakes that first-time homebuyers commonly make.Verify my mortgage eligibility (Sep 29th, 2023)
Buying a home isn't like buying most other things. If you over-extend yourself financially for an expensive handbag, or a laptop that you seriously cannot afford, the worst that can happen is having to live frugally for a few months. A home is a big financial decision, and it is important to set out a definite budget before you go house hunting.
There's no shortage of wants in the world. There's also no shortage of amazing places to live in. When it comes to buying a home, your budget supersedes all other requirements. Sure, it would be lovely to have a big backyard for the kids to play in, but if you can't afford it, don't reach too far to get one. In fact, try not to attend any open houses, if the house doesn't fit your budget. It'll just ruin your mood.
Sure, there is always wiggle room in any financial decision. You should however, be careful not to make a decision based on future projections. Nothing but cold, hard facts should be the basis for your decision.Verify my mortgage eligibility (Sep 29th, 2023)
Furthermore, you should also keep a list of needs for the home in mind. A lot of first-time buyers buy a bigger home than they need, just because they qualify for the mortgage. Think of it this way, let's say you get an auto-loan for a nice sports car. I can afford the monthly payments; you think to yourself. Once you start driving it around, you realize that it burns a lot of fuel. If something goes wrong, you realize that it's expensive to repair and maintain. Soon, it's sitting in your garage because you simply can't afford to use it every day.
This is exactly why a home should not be bigger or fancier than you need it to be. Costs add up. A bigger home means extra utility bills, greater upkeep costs, and higher property taxes. So, keep this mind when committing to a bigger home.
Assuming Too Much
You know why they say you shouldn't assume. The process to secure a loan has a lot of technical steps. One of the most important steps is getting pre-approved. A common first-time homebuyer mistake, is assuming that pre-approval is not important. Pre-approval allows you to know what you can afford, as it is an estimate by the lender of how much financing you'll be able to secure. Many sellers ask for pre-approval as well, and it's obvious that they would. They don't want to spend time going through all the finer details of the purchase, only to find out later that the house is out of your budget.Verify my mortgage eligibility (Sep 29th, 2023)
Another common assumption is that pre-approval means that your mortgage is guaranteed. A lot can change between the time you get pre-approved and apply for the mortgage. Lenders will conduct a more thorough investigation to determine whether you'll be able to handle this financial commitment or not. You may have changed jobs, taken out a new line of credit, or made any number of financial decisions that could affect the mortgage process.
As such, you should never assume. Always wait for solid ground before making the next decision.
One of the final steps in the loan process is the ability to walk through the house and see if there are any issues that you would like fixed before making the purchase. Often, first-time homebuyers make the mistake of doing so themselves. This is not recommended because the average person is not likely to know enough about houses to carefully assess the house. Maybe the house has problems that the seller has fixed just enough to make the sale go through. A team of professionals will be able to assess the situation more thoroughly.Verify my mortgage eligibility (Sep 29th, 2023)
It should also be noted that many people decide to skip this step entirely. Remember that a house is a big financial commitment. You don't want to buy something that will keep throwing up issues every month. The benefit of a professional inspection is that it puts the quality of the home you're buying beyond question. Even if the inspection returns poor results, it can help you negotiate a better deal in the end. So, it's a win-win either way.
It is important to stay on top of all things related to the purchase of your home. Planning and researching beforehand can help you avoid common first-time homebuyer mistakes. To find what kind of a home you can afford, follow this link.Show me today's rates (Sep 29th, 2023)