Becoming a First-Time Home buyer
Becoming a first-time homebuyer is a large commitment that can improve your life in many ways and provide a sense of security and stability for you and your family. But there are many things to consider and research before you make that commitment. These are some of the things you should consider before you buy your first home, so you can feel confident knowing you have done your homework and are getting the best deal.
Mistakes to avoid when buying your first home:
- Thinking it’s about the mortgage and nothing else. Many homebuyers think that when they can afford a mortgage, they can afford a home, which is not necessarily the case. Besides the amount of the mortgage some of the expenses you’ll be responsible for include homeowners insurance, property taxes, general maintenance, and in some neighborhoods Homeowners Association (HOA) fees. Of course, there are the monthly utility bills to consider as well.
- Not seeking help: As a first-time homebuyer, it’s challenging to know if you are talking to the right people, and you want to avoid dealing with someone who wants to take advantage of you. Before you entrust your personal information, and your money, make sure the professionals you are dealing with, (which can include a buyer’s agent, loan officers, and potentially a lawyer) are reputable by getting recommendations from trusted friends and then checking the professional’s credentials.
- Making an offer before getting pre-approved for a loan: Some first-time homebuyers make an offer on a home before they are pre-approved for a loan. They expect a mortgage lender to give them the loan they want. It’s important to get pre-approved for a loan before you start searching for your home so that you know what prices are within your range. This step will help you make a sound financial decision.
- Making a big purchase before your home closes: Even if you and the seller have already signed an offer to purchase a home, any additional loans that come up on your credit report could cause the closing to go awry. Creditors often take more than one look at your credit report to make sure your financial status hasn’t changed. So if you’ve had your eye on an expensive new gadget, try to delay the purchases until a couple of months after you have closed all paperwork on your new home.
As a First-Time Homebuyer, what you should consider:
Location, location, location! If you don’t like the way it looks, you can always change the interior or the exterior of a house, but you can never change its location.
- Commit when you feel ready. If you sign before you’re ready, you may regret that 30-year mortgage for a long time.
- Generally, the larger the down payment you put down, the lower your monthly mortgage payment will be.
- School districts have a huge impact on home value. Usually, better schools attract more families to the area, so the value, along with the demand for those homes, is higher.
- A home inspection is essential. Before you make an offer on a home, even if it looks ideal, make sure it really is in top shape and won’t start falling apart as soon as you step foot inside as the new owner.
- Review HOA (homeowner association) documents before signing anything. Some neighborhoods don’t have a HOA, but those that do expect all residents to abide by their rules and pay their fees. In some cases, they prohibit renting, something that is important if you are considering renting your home a few years later.