Avoiding these mistakes can make for a great home buying experience. Keep reading for 7 key mistakes to avoid when buying your first home.
Buying a home should be a happy experience. Yet, 44% of homebuyers have regrets.
While overspending is a huge factor in this, people may also regret the size of their home or not paying attention to the neighborhood they were buying into.
However, these regrets are easy to avoid. In fact, by following a few simple tips, you can buy your dream home without any doubts.
Do you want to know how? Keep reading to learn the top home buying mistakes to avoid to ensure you remain happy with your decision for years to come.
1. Going it Alone
Looking at homes is easier now than ever before. With ample real estate listing websites, you have the opportunity to look through hundreds of homes in your area with the click of a button.
You may think that this means you can forgo the extra cost of hiring a real estate agent. However, this can leave you with huge regrets later on.
For one, real estate agents do so much more than show you homes. They also help you through all the paperwork, give you valuable advice, and negotiate your new home’s price on your behalf.
Oftentimes, they also have access to new properties that haven’t made it onto those listing websites yet. They may also show you a home that you previously overlooked and help you see the potential in it.
Without a real estate agent by your side, you may end up feeling stressed and overwhelmed with the entire process.
2. Not Saving Enough
You probably already know that you’ll need a down payment ready before buying a home. But this is just the tip of the iceberg. You’ll also need to worry about closing costs, renovations, and property taxes.
Of course, you don’t want to completely drain your savings to afford these things. Ideally, you’ll want at least 2 or 3 months of mortgage payments leftover so you’re not scraping to pay your bills. It’s also a good idea to have money set aside to handle things that may break or if your renovation costs end up being higher than expected.
3. Not Getting Pre-Approved for a Loan
Many first-time home buyers come up with a budget and start shopping right away. However, you’ll want to get pre-approved for a loan first.
Depending on your income and credit score, the loan you get may not match your budget. For example, you may think that you can afford a $300,000 home, but creditors may only approve you for $200,000.
That is why it’s important to get pre-approved first. This will help you create a budget and ensure that you’re only looking at homes within your price point.
Don’t forget to take your time with this step. There are many different banks and even loans for unemployed couples that could give you varying loan sizes and interest rates.
4. Being Unrealistic with Your Budget
Although some people will run into the problem of getting a loan that’s lower than expected, many find that banks will offer them more than they originally planned for.
When this happens, it can be tempting to raise your budget in order to meet the loan you were pre-approved for. However, this can leave you with regret almost immediately.
You’ll be paying off this loan for the foreseeable future. So, you don’t want to end up living paycheck to paycheck because your monthly mortgage payments are too high.
Instead, stick with the lower end of your budget. This is your first home, after all. There will be time to upgrade into your forever home when you get a promotion or a higher-paying job.
5. Neglecting to Look at Programs
Did you know that there is all kind of programs out there to aid first-time home buyers? With the help of these, you could get assistance with your down payment or a lower interest rate on your mortgage.
So, make sure you do plenty of research at the federal, state, and local levels to see what kinds of programs are available to you.
6. Not Working on Your Credit Score
Interest rates add a ton of money to your loan. In order to get the biggest savings, you’ll want to find a loan with the lowest interest rates possible. And in order to do that, you need excellent credit.
So, before you start looking for homes and lenders, it’s important to work on your credit score.
Start by requesting a free credit report from at least one of the three main credit bureaus. Look for any errors, such as late payments that were actually paid on time or credit cards you never opened.
If your credit score isn’t where you want it to be, take the time to raise it a bit. You can do this by paying all your bills on-time, lowering or eliminating any current debts, ensuring that your credit card balance stays at or below 30% of your credit limit, and avoiding opening new credit cards.
This process can take quite a bit of time, so make sure you start as early as possible.
7. Letting Emotions Dictate Your Decision
When you’re finally ready to start house hunting, you may have this romanticized idea of finding the perfect home. However, it’s important to remain objective and logical.
For example, don’t stretch your budget too thin just because you fell in love with a house that’s out of budget. You also don’t want to overlook huge problems, like an odd layout or a damaged roof, just because you liked a few cosmetic details.
Instead, keep an open mind. Focus on finding a home that’s structurally sound, within budget, and is the right size for you. You can always renovate it over time and turn it into your dream home.
Top Home Buying Mistakes to Avoid
Don’t end up buying a home that you quickly regret. Instead, use the guide above to learn what home buying mistakes to avoid.
Are you looking for some interior design inspiration to turn your new house into a home? Then check