Purchasing a home is among the most significant financial decisions that you will make in your life. Becoming a homeowner can be exhilarating and exciting; however, you want to make sure you’re educated and prepared for the process so that you can enjoy a smooth home buying journey.
As a first time home buyer, there are many parts of the process where mistakes are possible, and you want to do your best to avoid common mistakes. There are several ways of streamlining the home buying process from both an emotional and financial perspective.
Make sure that you avoid these first time home buyer mistakes so that you can get the right mortgage and home for you.
Shopping for a Home Before a Mortgage
This is one of the most common mistakes that first time home buyers tend to commit. Securing financing for your home and knowing your pre-approved mortgage budget will help lead to success in house hunting. You do not want to start shopping for a home before you find out how much you can borrow. Not only can that lead to disappointment, but being pre-approved for financing makes your offer look more authoritative to the seller.
Using up All of Your Savings on a Down Payment
Spending all or most of your savings on the down payment and closing costs is another common mistake that many first time home buyers make. Some buyers will use all of their savings for 20 percent down payment to avoid private mortgage insurance; however, this is not wise as you are left with no rainy day fund for anything that may arise. It is better to make a slightly lower down payment while utilizing private mortgage insurance to keep some funds available if needed.
Failing to Hire a Professional Realtor
Some homebuyers also make the mistake of working directly with the seller’s real estate broker, whose primary responsibility is to secure the best price and terms for his/her client (seller). You will need an experienced real estate agent who will negotiate on your behalf and ensure that you secure the home at the best price. Hiring a realtor is usually the best option for first time home buyers.
Many first time home buyers don't act quickly once they find the right home. In a market that contains more buyers than sellers, you need to move fast once you identify the home you know you want. There is a fine balance between taking the appropriate time to make a big decision and taking too much time and losing out to another buyer.
Make sure that you conduct thorough market research when you feel like it's time to become a homeowner. Take advantage of the first time homebuyer education materials that are available to make the entire home buying process smooth and straightforward. For more first time home buyer information, download our eBook now!