Buying your first home may seem overwhelming, but it can be a truly smart investment if you research and plan properly. If you are a first-time buyer, you may think you understand the process. However, you may be making a few common mistakes that will end up causing emotional and financial distress. By avoiding these mistakes, you can purchase your first time in a timely and affordable manner:
Not Getting a Preapproval
If you start shopping for a home to buy without talking to a lender, you will be setting yourself up for trouble. Shopping the large selection of real estate listings without knowing how much of a home you can realistically afford will become stressful and depressing.
Before starting the home search process, contact a lender to get a preapproval. The home mortgages company will use your credit reports, income statements, and tax returns to determine a price range that you can not only afford, but be approved for.
A preapproval is also helpful when it comes time to make an offer. With a pre-approval in hand, the seller and their agent will see that you are ready, willing, and able to buy the home.
A preapproval will prevent you from feeling disappointed by only looking at homes you can purchase. Once you do have a home in mind, use the preapproval letter from your lender to help you finalize an offer.
Forgetting the Other Fees
Most buyers know they will need money for a down payment, but some first-time buyers will make the mistake of forgetting the other fees that will be necessary.
When making an offer, you may need to give the seller a small amount of money to show them that you are serious about the purchase. Known as earnest money, this deposit is usually a few hundred dollars only, but it is a fee that you should prepare for.
As a buyer, you must also remember you will be responsible for paying for the home inspection and appraisal. Both of these fees will be a few hundred dollars, as well. These fees may seem minor, but forgetting about them can be a costly mistake when you are budgeting.
Closing costs are usually higher than most buyers expect due to these fees. In addition, your total closing costs will include fees for homeowner's insurance and HOA dues, if applicable.
Buying your first home requires proper planning. With this guide and your lender's assistance, you can avoid any emotional and financial mistakes that can make the purchase a stressful one.