Before you buy a home, you must ensure you’re avoiding first-time homebuyer mistakes if you don’t want to waste money.
As a first-time buyer, you’ll likely do many things that people don’t recommend because you’re excited to finally get a house. However, making several home buying mistakes will not only prevent you from getting a decent home, but they can also cost you a lot of time and money.
Fortunately, we’ve got all the info you should know about first-time home buying 101. In no time, you can start looking for houses and have an easier time buying one that suits you.
Here are seven first-time homebuyer mistakes and how to avoid them!
1. Don’t Research Different Options
Although buying a house can be exciting, one of the most common first-time home buying mistakes is not researching different options. When many new buyers start looking for homes, they often check out a variety of properties. However, they don’t end up looking into a property well enough before deciding whether it’s right for them.
Researching different options will help you get a better idea of whether a house is worth the money. Not only will you see how much others are charging, but you can check out the conditions of various homes. You can then use this info to help you decide which type of house you’d like.
2. Don’t Ask Questions About a Property
Aside from not researching, many people hesitate to ask questions about a property. Whenever you want to know something, you should ask as soon as possible. You can request either the owner of the property or their real estate agent.
Doing this is crucial because it’ll prevent you from getting surprised later if you end up buying a property without knowing all the details. For example, you may never know something is broken unless you ask because an owner may not disclose that info.
3. Don’t Set a Budget
When it comes to first-time home buying 101, everyone is encouraged to set a budget before starting their search. Establishing a budget will not only help you narrow down your options, but you’ll also avoid spending too much.
As a first-time buyer, there’s a good chance that your budget will revolve around a mortgage. Unless you have enough money to buy a house outright, you’ll need to figure out how much you can afford to borrow. While you may agree to a specific value for a home, you’ll also need to pay for closing costs and other expenses.
Using something like this helpful tool will make it easier to calculate how much you’ll be spending on a property. From there, you can decide how much you can borrow based on the monthly payment.
4. Don’t Get a Mortgage Pre-Approval
As you can see, many home buying mistakes revolve around not doing much research. Another thing you can’t afford to skip is getting a mortgage pre-approval, which essentially outlines how much you can borrow.
Getting pre-approved for a mortgage can be done by visiting a bank. They’ll ask for the same info that they’d ask for a standard mortgage application, so ensure that you prepare several financial documents.
You should know that getting a mortgage pre-approval doesn’t guarantee that you can borrow this amount. However, it shows how much a bank would be willing to let you borrow if you apply for a real loan. The exact numbers will vary depending on your credit, down payment, house price, and more.
5. Don’t Save for a Down Payment
Speaking of down payments, not saving for one is another typical first-time homebuyer mistake to avoid. Any time you want to get a loan to buy a house, you must save for a down payment so the lender can see you’re financially responsible.
While you can have stellar credit, many banks expect you to save for a down payment of anywhere between 10% to 20% of the home’s cost. This not only helps them reduce how much they’re giving away, but it’ll help you get more favorable loan terms.
6. Don’t Improve Your Credit Before Buying
To further help you get a mortgage, you can’t avoid improving your credit score before buying a house. Without decent credit, you’ll have a hard time finding a lender that’ll give you enough for a home without charging high interest rates.
Improving your credit is as simple as paying off debts without borrowing too often. If you currently have a poor credit score and would like to buy a house, you’ll need to start working on it as soon as possible.
7. Don’t Calculate Repair Costs
The last home-buying mistake we’ll go over is not calculating repair costs. When people see that a house needs several repairs, the price tag often convinces them it’s a good purchase. However, they buy the home and realize that the damages are much worse than they thought.
If you find a home that needs repairs, ensure that you calculate how much it’ll cost you before buying. This will ensure you have enough to cover the damages without relying on another loan after getting a mortgage.
Avoid These First-Time Homebuyer Mistakes
After reading this article, you now know about all of the most common first-time homebuyer mistakes. Whenever you’re ready to buy a house, we encourage you to use this advice if you want to find something that’ll suit you without spending too much.
To learn more about home buying mistakes and different topics, check out our other articles!