4 First-Time Homebuyer Mistakes
Published on 3/12/2020
The stars have aligned and finally, instead of just watching those house hunting shows, it’s your turn to being the search for your first home.
You are in good company. According to the National Association of Realtors 2019 Home Buyer and Seller Generational Trends report, 34% of all home buyers are first-time buyers. In addition, 65% of those first-time, would-be homeowners are under the age of 37.
Buying your first home is one of the biggest purchases you’ll make. It is an emotional experience. But it’s crucial you don’t let the excitement of homeownership blind you to potential pitfalls.
Here are four common missteps first-time homebuyers should avoid.
Starting the search without a pre-approval: Don’t look at houses without knowing how much lenders say you can afford. A pre-approval from a lender proves your creditworthiness, which means your offer will be taken seriously be sellers. And be realistic when also evaluating your own budget. Calculate all the costs involved: not just the monthly mortgage payments, downpayment and closing costs. Have you planned for utilities, insurance, Homeowner Association fees, lawn care, pest control and more? Will you have any money left over to enjoy yourself now, handle any unexpected expenses and fund your future?
Skipping the inspection: Trying to save a few hundred dollars for an inspection now can cost you thousands later. This is your opportunity to discover any potential problems with the home before you buy.The last thing you want is to discover is that there’s an electrical, plumbing, roofing, mold or foundation issue after you move in.
Switching jobs or making a big purchase before closing: It’s not over until the closing is done. Lenders will look at your credit just before closing to make sure your financial situation hasn’t changed. Wait until you have those keys in your hand before making any big purchases or career moves.
Not learning more about the neighborhood: Do your research. Real estate websites like Zillow and Trulia, and neighborhood apps like Nextdoor, can give you the scoop about what life is really like in your new hood, from safety to schools.