Are you dreaming of becoming a homeowner? Although there are a few challenges first-time buyers face, becoming a homeowner doesn’t have to be a miserable, complicated process. Listed below are some tips that first-time homebuyers should know before house hunting, as well as common mistakes first-time homebuyers should avoid.
Tips for First-Time Homebuyers:
- Find out how much you can borrow
- Several factors impact the amount of money that your bank is willing to lend you. Because of this, you should be aware of your income, down payment, credit score, outgoings and current debts are important factors in this crucial step. Avoid looking for a home first and a loan later. Know before you start shopping!
- Don’t use up your savings on the down payment
- One of the biggest mistakes first-time buyers make is spending all or most of their savings on the down payment and closing cost. It’s risky to deplete your savings and live on the edge. Also, make sure you keep your wallet shut before closing. Lenders pull credit reports before the closing to make sure the borrower’s financial situation has not changed since the loan was approved.
- Do your research
- You must get an idea of what’s on the market. Don’t just look at the price tag, but check out what is going on in the surrounding areas. Is there an airport being built near by? What are the schools like?
- Never underestimate the knowledge of mom and dad
- Don’t be afraid to ask for help. They may have information and experience in handling issues you may not be aware of.
- Account for additional costs
- Don’t overlook the ancillary cost that come with buying a house. Look over the cost of taxes, valuation fees, agent fees, closing cost, HOA fees, etc. Keep utilities and other monthly outings in mind as well. Remember, just because you can afford the mortgage payments doesn’t mean you can afford to own a home.
- Don’t settle for the first property you see
- Before viewing houses, make a list of the most important features you are looking for. To avoid any costly surprises, learn the difference between cosmetic issues and real ones.
One of the largest financial decisions people make in their lives is buying a home. Educate yourself before you start viewing homes and find a reputable real estate agent, a good loan officer or broker, and possibly a lawyer. With a good agent, you will be protected from any of these pitfalls you might come across during the home buying process. The more you educate yourself, the less stressful the process will be!
For more tips for first-time home buyers, visit http://www.investopedia.com/articles/mortgages-real-estate/08/first-time-homebuyer-guide.asp