First-Time Home Buyer Mistakes – Searching for the right home can be stressful enough, but mistakes do happen all the time, typically a first-time buyer. It can often crash hopes and dreams by making a wrong turn during the decision process. In fact, it is one of the top reasons a deal will fail.
Ever since the so-called Great Recession of 2008, banks have been tightening their lending policies, and it’s getting tougher. However, these measures were needed a long time ago to protect consumers and banks. The system has failed many people, resulting in foreclosures and bad credit.
Getting approved for a mortgage, finding the right agent, searching for the perfect home and staying within a budget are some of the challenges buyers must face before they become homeowners.
Many first-time homebuyers decide to buy when they feel ready for a mortgage. But just because they can afford the mortgage payments doesn’t mean they can afford to own a home. For example, there are other costs involved such as insurance, taxes, homeowners association dues, maintenance, and higher electric and water bills.
Before you shop for a home, consider your credit and mortgage prequalification. It is a rare to find a homeowner that is willing to finance you, especially one with no money down. They are selling the property because they want the money.
You can save yourself a lot of time by getting a prequalification. You might have to spend the next 6 to 12 months fixing your credit. This is the best thing you can do because you will save a lot of money on lower interest when you have good credit. The interest will determine your monthly payment.
New to the homebuying game? You’ll need a reputable real estate agent, a good loan officer or broker, and perhaps a lawyer. Don’t try to do this alone.
Venturing into this process alone, without professional help, is never a good idea, as first-time buyers should not try to deal directly with the listing agent. If you hire an agent without a referral from friends or family, ask the agent to provide references from previous buyers. The same goes for loan officers or mortgage brokers.