The 6 Biggest Mistakes to Avoid When Buying Your First Home
It’s both exciting and a little scary to buy your first home. That feeling of nervousness is normal! But, there are a few mistakes you want to make sure you avoid when buying your first home to ensure that you are doing it “right” and then, fear not!
Not knowing how much you can afford. Think monthly payments first and foremost, not just the purchase price. Next, get pre-approved by a lender BEFORE you start looking at homes. They may approve you for more than you are comfortable spending per month, so ask them to approve you for the monthly payments you want to spend, not the highest purchase price possible. Make sure you understand the correlation between your purchase price, monthly payments and downpayment required. This is different for every home buyer. Your friend at the office might be able to afford a much more expensive house by putting more down, for example, so make sure you know what your particular situation is and look for homes accordingly. You also should take into account not just the cost of the home but utilities, repairs and maintenance.
Not realizing that the wrong mortgage can cost thousands of dollars of needless interest. You might qualify for an FHA mortgage at 3.5%, but you have HUGE monthly mortgage insurance premiums that drive up your monthly payments. Plus, there are some great loan programs available right now that can save you hundreds of dollars a month. For example, a 5% down loan where you don’t pay any private mortgage insurance. There are all sorts of loan options available these days and the “right” one is based on your particular financial situation and how long you plan to own your home. One loan definitely does not fit all any more, so do your homework and know the options and what is the right choice FOR YOU!
Not discovering hidden defects before you buy a home. Never buy a home without a professional home inspection. But even before you reach that point, YOU need to know what the potential problems are in the home. From the get-go, ask the seller questions such as: How old is the heating and air conditioning system? When was the roof last replaced? Often there are warning signs such as water damage that the seller doesn’t necessarily need to disclose, but you can see when you are looking at the home more closely.
Not knowing how much your credit can affect your ability to buy a home. Lenders are tougher now and you need to have a decent credit score to get a low interest rate. About 3 – 6 months before you want to buy a home, start monitoring your credit online. You can go to websites such as www.myfico.com and pull your own credit for free. Do this very early on, before you start looking at homes, so you don’t have any surprises. Most credit issues can be repaired but it can take a few months, so if you aren’t monitoring your credit on a regular basis, check it early on in the process.
Not knowing about all the great first-time buyer programs out there from state and local agencies. PLEASE don’t make this mistake! These programs are only for first-time homebuyers so now is your only chance to take advantage of them. You can reap HUGE savings! DC Opens Doors, HPAP, VHDA, and VA loans all have lower than market interest rates. There are down payment assistance grants and zero percent interest loans. There are even programs that exclude you from having to pay property taxes if your income qualifies! I can help you with these programs and determine if you qualify for them.
Not asking your real estate agent questions if you’re confused or need clarification. There are no stupid questions when you are making the biggest purchase of your life! You should be well educated from the minute you first meet with your agent to well after settlement. Don’t hesitate! This is your first time buying a home and your agent should have done this hundreds of times and will be able to explain everything to you so that you feel knowledgeable and confident about your decisions every step of the way!
Ok, now that you now what to avoid when buying your first home, you have nothing to fear and you will make the best decision for YOU! Now you can go out armed with the knowledge you need to enjoy the homebuying process!