Buying your first home is the ultimate exercise in adulting. From saving up for your down payment to finding the house and community with the best amenities and resources to fit your lifestyle and goals for the future, there are a number of factors to consider before and after you take the plunge. Here are five keys (see what we did there?) to avoiding common first time homebuyer mistakes and pitfalls.
5 Common Pitfalls to Avoid for First Time Homebuyers
There are a number of mistakes known to commonly trip up new homebuyers, from crowdsourcing information on the internet in lieu of working with an experienced real estate pro, to failing to nail down that pre-qualified mortgage loan (even if you have good credit).
1. Not Knowing What’s Best for Your Down Payment
According to lending experts, many first time homebuyers tend to over or underestimate how much will be required for a down payment. If you can swing a 20% down payment, go for it. But it is not a requirement, and waiting to save an “ideal” amount could actually make your money cover less as the market appreciates over time.
2. Taking a DIY Approach
Doing your own research and using every resource available to you to get information about your credit and financial situation and the options available to you as you prepare to buy your first home is a great idea. But working with a seasoned real estate professional and mortgage lender is the best way to protect your investment and find the home you want.
3. Putting the Home Before the Mortgage Loan
So you’ve found your dream home! With a little help from good ol’ social media! That’s great. Be sure to like it, Pin it, take some screenshots, and then step away and make sure you pre-qualify for the mortgage loan you’ll need to make it happen.
4. Putting the Champagne on Your Credit Card Before the Close
You’ve closed! Hashtag homeowner life! But before you put that case of Veuve, new furniture or other celebratory purchase on your card, know that that lenders may double check your credit report one more time to make sure nothing has changed. Play it safe until the ink is officially dry.
5. Failing to Account and Budget for Related Expenses
After hustling for the down payment, many young first time homebuyers are met with a rude awakening – there’s more to closing on your house than forking over the down payment check.
As with any big investment, doing your research ahead of time and taking advantage of professional resources will put you on the road to successfully buying your first house.
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