Looking to buy your first home? Congratulations! Homeownership is a major financial step. Many first-time buyers make mistakes along the way when purchasing their first home. Take a look at the top five mistakes made by first-time buyers, so you can be prepared and avoid the biggest pitfalls as you shop for your first home as noted by stelklaw.com.
- Buying More House Than You Can Afford
As you search for your first home, don’t take out the largest loan available to you. It’s important to understand what you can actually afford.
Just because you’re approved for a certain amount doesn’t mean you can realistically afford a home at that price point. You need to consider your other monthly expenses in addition to the cost of a mortgage.
For example, you’re approved for a loan with an estimated monthly payment of $2,500. You should take into account your existing expenses like car insurance, existing loans and credit cards. It’s also important to remember that homeownership comes with other costs. If the water heater goes out, you can’t call your landlord or put in a request with housing maintenance.
- Using the Wrong Real Estate Agent or Company
It’s recommended that you work with a real estate agent or company when buying your first home. They’ll be able to help you navigate the buying process smoothly and be available to answer your questions along the way. Not all agents are created equal. Look for an agent that works directly with you instead of delegating communication to an assistant or sub ordinate.
If you’re a Veteran, find a real estate agent who’s primary mission is helping Veterans. Choose a real estate company with experience in VA loans and the VA loan process. This helps ensure you’re not missing out on the biggest perks of your VA mortgage benefits.
- Not Focusing on the Important Details of a Home
It’s easy to get caught up in the flashy accents when touring homes. Granite countertops, stainless home appliances and a tile walk-in shower might have you thinking you’ve found the perfect home. Remember to stop and take a second to really consider the importance of these relatively small upgrades.
You’ll probably find that there are more important features to consider in a home. The structural integrity of the home and major systems should be in good shape, or the price should reflect the necessary repairs. For example, a newly-renovated bathroom doesn’t make up for a roof that’s suspect of needing repairs or a heating and cooling system that will pass inspection but should have been replaced years ago.
- Forgetting About Costs After Moving In
A lot of first-time homebuyers do not set money aside for the many expenses incurred after buying the home. . They might have cash saved for a down payment and closing costs if necessary, but they have no money left to pay important decorations or furniture!
You might be able to find ways to avoid paying thousands of additional dollars in fees. In some cases, the seller might be willing to pay for your closing costs by rolling it into the cost of the home. If you’re a Veteran, you can look for VA mortgage programs that allow you to pay zero closing costs. When combined with a zero-down VA loan, you could be saving thousands on your first home purchase.
- Trying to Wait for the Perfect Home
First-time buyers have a tendency to pass on great homes because they think something better will come on the market if they wait. Finding a home that checks every box on your wish list is near impossible. Don’t lose out on a great house because you’re worried about finding the perfect one.
The real estate market tends to move fast. If you wait too long looking for perfection, you might have to settle for a less desirable home at a higher price. Instead, be open and flexible about the type of home you buy, and remember that many aspects of a home can be changed over time.
For example, you find a home in a great neighborhood at an excellent price, but it has outdated carpet and wallpaper throughout. Rather than passing on a good deal, you could buy the home and replace the wall paper with paint to start with. Then you could save for new flooring. In a few years, you’ll have a home with an almost completely new interior.