Biggest Mistakes to Avoid When Buying Your First Home – Buying a home can be an anxious process, and that worry is compounded for anyone embarking on homeownership for the first time.
There’s so much to do and so much you don’t know that “overwhelmed” doesn’t seem like an adequate term. Even though you don’t want to scare yourself away from the entire process, you should be mindful of a few common pitfalls that first-time buyers frequently fall into. If you’re aware of these five potential blunders — and can avoid them — you’ll save yourself a lot of heartache during your home-buying process.
Mistake No. 1: Not understanding your down payment options
The down payment is the most difficult issue for many first-time purchasers. If you’ve ever purchased a car, you’re certainly aware with the notion – it’s money that you put toward the overall cost of the transaction.
A couple thousand dollars down payment might offer you a good start on your car. However, if you do not have a particular amount to put down on your house loan, you may end up paying private mortgage insurance (PMI) for the life of the loan. PMI may cost between 0.5 percent and 1 percent of the overall loan amount, depending on your credit score, the bank, and other criteria.
Mistake No. 2: Not getting prequalified for a loan
With the amount of money you intend to put down on the home, prospective PMI, and other cost factors, your monthly cost could be much higher (or lower) than some of the online calculators would show you. So, before you put your faith in the “estimated monthly mortgage loan amount” numbers that appear next to your potential new dream home on Realtor.com, Zillow, or a brokerage website, figure out what you can truly afford – and that involves getting prequalified for a home loan.
Also Read: Things A Real Estate Agent Should Do for You
Mistake No. 3: Not finding a qualified real estate professional
You may be wondering whether a real estate agent is even necessary these days, given how easy it is to find homes online. After all, isn’t the difficult part – locating a place to buy — something you can accomplish on your own?
Well, perhaps. However, the process of purchasing and selling a house is loaded with hundreds of details that must be planned for and handled to ensure a good end. Not to mention places with competitive markets where you may not be seeing the most up-to-date listings — that home you just fell in love with online may be under contract before you can schedule a viewing.
A registered real estate professional can not only ensure that you have access to listings as soon as they reach the MLS, but they can also provide expertise on the area where you wish to move. You want to work with an honest professional who is dedicated to defending your and the public’s interests, whether it’s comments on who can help you with homeowners’ insurance rates or warnings about some of the issues of owning a property in that specific location.
Mistake No. 4: Not spending the night in the neighborhood
If at all feasible, try to find an Airbnb or other vacation-rental sort of setting where you can rest for a night or two — preferably closer to a week — so you can try on your new neighbourhood. Is an 8 a.m. arrival time at work still fair given the travel in this neighbourhood? This is an opportunity for you to learn how to use public transit or new routes to work so you know exactly what you’re getting into. At the very least, you may learn enough about the neighbourhood to know how close (or far) you need or want to be to the bus route and tailor your property search appropriately.
Mistake No. 5: Not understanding what’s fixable and what’s a deal-breaker
A good real estate agent can also help in this area. They see so many houses in various stages of repair and updating that they can show you where you can claim an extra foot or two for bathtub space (and help you figure out how much it will cost and who’s trustworthy enough to take on the job) or tell you that the ceilings are too low for any changes to make a significant difference.
In markets where entry-level houses are snapped up as soon as they reach the market, understanding what’s acceptable and what you just cannot accept is a major benefit – it will help you make a confident decision on the fly. None of these mistakes will prevent you from purchasing a property, but they may cause delays and cost you hundreds (if not thousands) of dollars in the end. If you can avoid them, you’ll be signing the papers on your ideal home before you know it!
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