- Don’t make the mistake of not getting prequalified!
- Get help from a mortgage consultant!
- Know ALL the costs!
Looking to buy your first home? While exciting, it can be stressful and overwhelming to think about a mortgage, prequalification and down payments. Luckily it doesn’t have to be! Here we listed the 5 disastrous mistakes all first-time homebuyers can avoid.
1. Not Knowing ALL the Costs
Many first time home shoppers go looking around for houses they think they can afford just by thinking about the mortgage cost. People often forget about home insurance, property tax, homeowner’s association, electric and water bills. Once all of that is added to the mortgage, the cost of home ownership ends up being way more than what they had originally thought.
2. Not Getting Prequalified
Knowing what you can afford instead of just guessing is a lot better when it comes to home buying. A mortgage lender will tell you your options based on factors like your credit and income so you know exactly what you can afford. This makes the home search much more efficient and less heart-breaking than trying to put an offer on a home that won’t get approved.
To get prequalified, talk to a trusted mortgage consultant! Find your local mortgage consultant here.
3. Not Getting Help from a Pro
One of the biggest mistakes first-time homebuyers make is thinking they can do it alone. You’ll want to find a good real estate agent and mortgage consultant to help look out for your needs and best interests.
People who try to find a home independently have to deal with sellers and listing agents without the help of someone who is on their side. Those who do that often don’t get the best deal or even fully understand everything they agree to sign.
You’ll want someone who gives you the advice and guidance you will need when finding your future home. Learn how to find the right real estate agent for you here.
4. Going Broke From the Down Payment
Putting a large amount of money toward the down payment on a home could potentially become a huge mistake made by first-timers.
Homebuyers sometimes scrape all their savings to make a 20% down payment thinking this will allow them to avoid mortgage insurance, which seems like beneficial savings at the surface. However, a downside many home owners don’t think about is that they could have no money saved for unexpected costs like maintenance and repairs that come with owning a home.
There are many down payment assistance programs to avoid this from happening depending on borrower qualifications.* You can get the home of your dreams and still have money for a rainy day. Learn more about down-payment assistance programs here.
5. Making Large Purchases BEFORE Closing the Deal on Your Home
Let’s say you already got prequalified for a loan and found the home of your dreams! You signed the contract and now you’re just waiting for your home to close. You’re excited to start your life in that home and now you want to go furniture shopping! How can this affect the loan?
When buying a home, lenders pull your credit reports not only to get you approved for the loan but right before the loan closes to make sure your finances are still the same. Many first timers think that once the home has the sold sign out front everything is taken care of, but that’s not the case.
Making other big purchases, such as buying furniture or a leasing a new car, affect your credit and can jeopardize your loan. This is often learned the hard way by first-time homebuyers.
With these tips, you’ll be able to get the home you want quickly and efficiently! Happy home hunting!
*Some program restrictions and requirements apply. Please contact your On Q Financial, Inc. Mortgage Consultant for more information.