When you buy a home for the first time, it’s an exciting step in your life. However, it can also be a complicated process filled with important decisions. That’s why I’ll share the 5 most common mistakes so you can learn from them and avoid them, ensuring a successful home-buying process with the guidance of a real estate expert.
1. Requesting a High Loan Amount It’s not advisable to borrow up to the limit just because you “qualify” for a larger loan. Lenders aren’t aware of the details of your monthly budget, nor can they predict how your financial circumstances might change. Therefore, it’s safer to request a loan that results in a manageable monthly payment aligned with a financial plan you’re completely comfortable with
2. Not Checking Your Credit History Early Credit scores are an essential part of your financial profile and can influence your ability to secure a mortgage with the best interest rate. In addition to working on improving your score, it’s crucial to review your credit report in detail to ensure it doesn’t contain any errors.
3. Avoid Skipping Lender Comparisons You can obtain a mortgage from various types of lenders, and there can be significant differences in their customer service. Ideally, work with a loan officer who excels at answering your questions, guides you through the mortgage application process, and ensures that your application smoothly progresses through underwriting. Interviewing lenders before selecting one can save you costly headaches
4. Explore Different Financing Alternatives When choosing a mortgage lender, carefully analyze their mortgage products. This includes not only the interest rate but also associated fees. The differences in fees among different lenders can be significant. Understanding the distinctions between mortgage interest rates and annual percentage rates (APR) will help you reduce the overall cost of your loan. Don’t underestimate the importance of comparing options and choosing wisely.
5. Don’t Skip the Home Inspection During the home-buying process, it’s crucial to protect your finances by including an inspection contingency in your purchase offer. While it may seem like an additional expense, spending between $300 and $500 now can prevent much larger outlays in the near future. For instance, if the inspection reveals that the house needs a new roof, you could save over $20,000 on unexpected repairs
Don’t underestimate the importance of this step to ensure that your investment is solid and free of unpleasant surprises. I invite you to read this article where we delve into the importance of a home inspection in more detail.
You can learn more about the mistakes you should not make as a first-time home buyer by watching this video, go here and don’t miss any details.