No one is perfect, we all make mistakes but when making one of the biggest financial decisions of your life you should definitely do your research so you don’t make a big mistake! I came across a great article from MSN Money outlining the most common first-time homebuyer mistakes. Here are some of the most common mistakes:
1. Knowing what you can afford- We should of all learned from the subprime mortgage mess, when banks where lending to those who couldn’t afford their payments. You need to make a budget and list all of your monthly expenses (excluding rent) and make sure to also include major expenses that occur only once a year like insurance premiums you pay annually or annual vacations. Subtract this total from your take-home pay and you’ll know how much you can spend each month for a mortgage payment.
2. Skipping mortgage qualification- What you think you can afford and what the bank is willing to lend you doesn’t always match up. It is extremely important to get pre-approved from a lender for a loan before placing an offer on a home. You will be wasting everyone’s time involved (your agent, listing agent, your time, etc) if you find out at the end of the process that you don’t qualify for the loan. Also be aware that even if you have been pre-approved for a mortgage, your loan can fall through if you do something to alter your credit score, like finance a car purchase, open credit card to buy furniture, etc. Make sure you have clear communications with your lender and that you are comfortable discussing and disclosing information with them.
3. Failure to consider additional expenses- Once your a homeowner you will have additional expenses on top of your monthly mortgage payment. You will need to pay for garbage pick up, water, electricity, any home repairs such as sump pump failure, furnace, air conditioning, gutter cleaning, landscaping, etc. You will want to allow some room in your budget for the unexpected.
4. Being to picky and not seeing potential- Too many first-time buyers are looking for the “perfect” home. You need to see the potential in some homes that with a few $1000 dollars you could paint, repair, replace items to make home better through the years rather than paying $20,000-40,000 extra on a home because the seller made a few minor upgrades to be able to sell the home at a higher price because it “looked” better. Keep your mind open.
5. Getting swept away- Don’t let a “staged” home sweep you away, many times agents/sellers will “stage” a home making it look better and helps sell the big picture of the “perfect” home. Use your own vision because you could find a home that just needs a little extra love but will be thousands less than the “staged” home.
6. Neglecting to inspect- Inspections seem costly but in the long run will save you! ALWAYS get an inspection! You never want to buy a home without one because you never know what potential “costly” problems could be hiding in the seemingly “perfect” home!
7. Not hiring your own agent or using the seller’s agent- You want to hire an agent because they will have your best interest in mind. In not coming into an open house without your own agent or not saying your working with one, sets you up to have the selling agent work for you in which they will not be putting your best interest first.
8. Not thinking about the future- Always thinking about where you want to be in 5-10 years. Will you have kids, will this home expand if needed. What are the schools like, will there be future neighborhood expansions, will a highway be built nearby, etc.
These are just a few mistakes first-time homebuyers make,click here to see the complete article which has more tips.
If you are ready to get pre-approved please click here. If you have any questions please call or email me.
Summit Mortgage Corporation
303-779-0591 ext. 101