Buying your first home can be an exciting and overwhelming experience. Sometimes, the excitement of it all can cloud a homebuyer’s judgement, forcing them to make mistakes that could cost them big financially in the future.
As a first-time homebuyer, it’s normal to make mistakes, but if you keep reading, you’ll discover several common home buying mistakes that you can avoid by simply knowing about them.
1. Having A Lot of Debt
Having a high percentage of debt can make it difficult, but not impossible, to obtain a mortgage. If you carry high debt and get approved to buy your first home, you could be setting yourself up for a world of trouble later as you struggle to pay your bills each month.
It’s a good idea to pay down as much of your debt as possible before even beginning the search for your first home.
2. Buying a Home You Can’t Afford
Many first-time homebuyers make the mistake of buying a home they can’t afford. Just because the lender says you can afford a $300,000 home doesn’t mean you should buy one.
Look for something that falls on the lower end of your price range instead to avoid stretching your budget too thin.
3. Placing Style Above Structure
Searching for a new home is exciting because you get a chance to see many different types of homes. It can be easy to overlook the structure of a home if its décor and features are grand. It’s important to consider the structure of the home first, because it’s much harder to address structural issues after the fact than it is to change décor or style once you’ve purchased the property.
4. Beginning the Search too Soon
Beginning the search for your first home before you’ve saved enough money can be a problem, especially if you find one you love. You might think you can swing it even though you’ve not saved enough yet, which can put you in a financial bind later.
Before you begin the search for your dream home, be sure you’ve saved plenty of money for the down payment and closing costs to avoid having to pay a higher interest rate.
5. Forgetting About Closing Costs and other Upfront Fees
Many first-time homebuyers don’t realize there’s more to buying a home than just the purchase price. There’s closing costs, homeowner’s insurance, property taxes, agent fees, and more. Many of these expenses are paid at the closing and they can be quite high. Don’t forget about these costs as you’re saving for your home.
6. Not Getting Pre-Approved for a Mortgage
You don’t have to get pre-approval, but it’s a good thing to have. It tells the seller you’re serious about buying a home, and it lets you know exactly how much home you can afford.
7. Not Comparison Shopping for a Mortgage
Every lender is not the same, which means you may or may not get a better deal if you shop around for your mortgage. Everything is negotiable, so don’t limit yourself by sticking with one lender. You may get a better deal somewhere else.
Buying your first home can be exciting, but the process can be fraught with pitfalls if you’re not prepared. Remember the tips above to avoid making common mistakes as you purchase your first home.