Buying a home is a significant financial decision and a dream come true for many. However, it can be an overwhelming process for first-time homebuyers, and mistakes are common.
This blog post aims to highlight some of the most common mistakes first-time homebuyers commit and provide tips for avoiding them. Read on to learn more!
Not Starting Approval Process Immediately
Homebuyers who take the time to register for approval in preparation gain several benefits. The quickest and most accurate way to figure out how much home you can afford is, first and foremost, to get approved. Even though you may understand all the expenses related to house ownership, this is not the time to rely on human error.
Buyers can avoid setting their expectations too high or taking on more than they can manage by having a dependable price range after receiving initial approval from a mortgage lender. An approved buyer also gives the impression that they are more serious about the vendor, which can help them win bid wars.
Only Focuses on One Mortgage Rate Quote
Obtaining a mortgage estimate from a lender may seem time-consuming, as the process typically involves conversing with a professional and submit financial documentation. In this instance, relying on the initial estimate may save time but not money.
A different lender may offer a deal that will save you money over the life of the loan. Therefore, obtaining multiple quotes is the best method for buyers to select the right lender and accept the most advantageous rates and terms.
Purchasing a House Beyond Budget
When a lender evaluates your financial information for approval, the DTI determines the proportion of your monthly income toward debt payments. However, they only account for some expenses. Therefore, purchasing a home for the whole amount of your approved mortgage may make managing your other monthly obligations difficult.
Consider any monthly expenditures that may have been overlooked during the initial approval process. Consider the additional costs of homeownership, such as closing costs, maintenance, and the prospect of increased utility costs, in addition to your current budget.
Overlooking Credit Report
Throughout the home-buying process, ignoring or failing to monitor your credit score can result in unchecked errors affecting loan approval or less favorable loan rates and terms.
Although your credit is drawn during the lender’s initial approval, it will be rechecked just before the closing date. Any changes to your credit report could result in loan modifications.
Assume you register for new credit cards or must make payments on existing ones before expiration. In such a scenario, your credit score could fall, making it difficult to obtain financing.
Skipping a Neighborhood Tour
Getting to know your prospective neighbors is a good idea because moving to a new property necessitates relocating to a new neighborhood. Investigate the area before buying to ensure it fits your lifestyle.
You’re interested in finding out what area attractions, like swimming pools, dining options, parks, and museums, are accessible. To estimate travel time and expenses, check the distances to your workplace, the grocery store, and the hospital.
Purchasing your first home can be an exciting but overwhelming experience. However, avoiding common mistakes can save you from financial setbacks and disappointments. By following these tips, you can ensure a smooth and successful home-buying process and finally own your dream home.
Are you a first-time home buyer looking to learn more about home buying? Look no further than the First Time Home Buyer’s 30-Minute Boot Camp by Andy May Group LLC! Join us today and gain valuable insights and tips to make your home-buying experience successful.
For more information please contact Andy May at 919 771 3379
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