Buying a home for most people is equal to realizing their biggest dream. Most adults work hard and work long hours towards the idea of owning a home someday. But, the road to homeownership is not always smooth.
This fact is even more evident with first-time home buyers. Some of them operate on the excitement of acquisition rather than logic. Some are not well-versed with the whole process of buying a property. They often overlook some things and end up confused. Some of them may also have troubles or regrets while undergoing the process of home buying. Learning of the common blunders would help to lessen such scenarios. Here are some common mistakes that first-time home buyers commit.
Overlooking First-time Home-buyer Financing Options
Some people take a longer time to buy their homes. This is because they believe they have limited financing options. What they do not realize is that there are government-insured programs they can look into. The first is a housing loan sponsored by the Federal Housing Administration. The Veterans Affairs and the Department of Agriculture also have home loans. Each loan has its advantages and drawbacks. Among the three, the FHA loan is the one that most first-time home buyers avail.
When searching for a house, you must have a raised awareness of some financing options. You should not stop at what you know and is on the surface. Ask for help from a mortgage lender to give you further insights into the choices available. The earlier you look at some options, the earlier that your dream could find fulfillment.
Searching for a House Before Getting a Mortgage
Getting caught up with all the beautiful homes is very easy. Different properties can appeal to a home buyer on various levels. It could be the location, the features, or the neighborhood. You could even have your eye set on a particular house.
But, there is one essential thing that you may forget, you could miss getting a preapproval. Any home buyer must get this thing straight. The first step to the home buying process is to secure a preapproval. This shows that you are serious about the whole process of owning a home. It also gives you a clear perspective of how much you can spend.
The issue of not getting preapproved first is you may lose the property you like to other buyers. Competition in home buying is stiff. Thus, you must have the critical documents ready before dipping to house searching.
Overstretching the Budget
Another pitfall that first-time home buyers encounter is focusing on the down payment alone. You may have surpassed paying the down payment but remember that it is only the first step. Do not forget to factor in closing costs. Your monthly mortgage is also a regular expense you have to deal with for a long time. Stretching your budget too thin at the beginning would not give you enough wiggle room.
The danger of such a bold action is the inevitable risk of foreclosure. It would be harder for you to let go of a home due to a lack of proper foresight. Thus, when looking for a home, be realistic with what your budget can afford. Your agent could help you see in a more objective way how you should divide your funds.
Forgetting to Factor in the Neighborhood
You found a house that is a perfect fit for your needs and personality. It is also within your budget range. Then, you think your search is over and you hit gold. It could be a yes or a no. Before buying this property, you have to study one more factor: the neighborhood.
Look around if the vibe of the neighborhood and town is good for you. This is more important if you have a family. Are the values of the community the same as the ones you hold in your family? Would you have a more comfortable lifestyle when you live here? You must look at safety, education, leisure, and such things.
There is no argument about a beautiful home. But it is not the end-all-be-all of home buying. You can find ways to improve a house once you have bought it. But, it is harder to change the neighborhood where you belong.
Falling into Being “House Poor”
With owning a house comes many expenses and responsibilities. Aside from the mortgage, you have to set aside a chunk of your income for property taxes and home insurance. This is not to mention major and minor renovations to keep your home in top condition. This is something that most first-time home buyers forget. Your expenses would not stop once you get that house key.
That is why buying a house needs great contemplation. Would you be able to sustain all these expenses and still live at a comfortable level? Your answer should be a yes before you think of buying a house. Remember that a home should be an asset and not a liability. It should be a form of security for you, not a source of stress.
Buying your first home is a major milestone. The right knowledge would help you avoid the pitfalls of first-time home buyers.