So, what are the 5 mistakes you should avoid? Let’s take a look:
Mistake #1
Not figuring out how much house you can afford. This is easy to overlook. Before you even begin looking for your first home, you should determine how much you can realistically afford. For many first-time home buyers, the ultimate goal is to buy a house and obtain a loan that will keep your monthly mortgage payment reasonable and within your budget. If you want to avoid looking for homes that are way out of your price range, use our affordability calculator to figure out what you can really afford.
Mistake #2
Making the assumption that you are prepared. Just because you’re ready for a home and a mortgage doesn’t mean you can afford one. A home mortgage includes property insurance, taxes, homeowner’s association dues, and, in some cases, maintenance, as well as higher electric and water bills than an apartment renter would.
Mistake #3
Purchasing without a pre-approval. Home buying does not always start with house hunting. Ideally, it should start with a pre-approval from a reputable mortgage lender. Remember that purchasing a home should be a logical, not an emotional, decision. By first visiting a lender and getting pre-approved, you will know how much home you can afford
Mistake #4
Not looking into first-time home buyer programs. Many first-time home buyers may be unaware of the available programs. It’s critical to do your research and determine which programs are available in the state where you want to buy a home. These programs may even provide qualified home buyers with down payment assistance, so it’s worth looking into.
Mistake #5
Spending all of your savings on a down payment. Sure, putting down 20% to avoid mortgage insurance sounds great if you can truly afford it. However, emptying your savings account is problematic for a variety of reasons, particularly if you require a rainy-day fund. If you’re moving from an apartment to a house, chances are you’ll need some furniture or some money to decorate your new place. Fortunately, there are excellent down payment assistance programs that do not necessitate a 20% down payment. It all comes down to research programs in your area and situation.
