First-time home buyers are often excited about becoming homeowners and settling down. Although many people are prepared for the process, there are common mistakes that are made due to a lack of experience. If you want to save money and have a smooth process, there are a few mistakes to avoid.
1. Shopping Around Before Getting Pre-Approved
It’s fun to begin shopping around in the local area for a new home, but it can be easy to fall in love with a house before getting pre-approved. Some sellers won’t want to wait for you to get pre-approved and will sell the home to another buyer. Make it a point to apply for a home loan ahead of time to ensure that you’re prepared.
2. Get a Home Inspection
According to cnbc.com, many buyers find their dream home but fail to get a home inspection because everything looks good on the outside. Approximately 10 percent of homes are never inspected, which can lead to a long list of issues later on after you move into the house. Hiring an inspector will alert you to repairs that are needed and can allow you to have more negotiating power.
3. Look at the Neighborhood
Check out the neighborhood to determine if the surrounding properties are maintained well and are in good condition. Visit the area at different times of the day to determine if you can hear nearby traffic or if people are loitering on the streets.
4. Not Knowing What You Can Afford
If you don’t take the time to sit down and crunch numbers, then you may purchase a home that is out of your price range. According to investopedia.com, many first-time buyers don’t have a budget. Calculating your household income by two or three and incorporating your debt-to-income ratio will allow you to have a price range.
5. Failing to Consider Other Expenses
When buying a new home, many people may assume that they can afford the monthly mortgage payment but fail to consider additional expenses that come with homeownership. You’ll also need to factor in the cost of HOA fees, property taxes, utilities, landscaping services, homeowner’s insurance, and maintenance costs. You should be able to afford to maintain the home long-term to ensure that it increases in value.
6. Being Too Picky
Being overly picky and lacking flexibility with the home that you own can cause you to lose out on appealing properties. Keep in mind that as a first-time homebuyer you’ll need to compromise on specific features of the property since you’re limited to your funds. You may also want to consider renting until you can afford a home that has everything you desire.