The home buying process is a learning process, and even people who've gone through it time and time again can still make costly mistakes. These common mistakes homebuyers make aren't only about money; they can involve choosing the wrong location or house. It's almost always a stressful, high-pressure experience, but you don't want to make mistakes that will haunt you later.
5 First Time Homebuyer Mistakes
Buying your first home is overwhelming, and many rookies don't know where to turn for objective advice or think they don't need it. Rocket Mortgage has a long list of possible mistakes, and the first is not getting preapproved for a mortgage. This step is crucial because it shows how much you can afford and makes you seem more serious and qualified to buyers. You will also want to try to get more than one interest rate quote since lenders offer competing packages that you should compare with each other.
It's possible to save money by not using a real estate agent, but having one in your corner can help you get a better price and address problems that might come up. They also have faster access to new home listings, are familiar with more neighborhoods and schools, and have connections to local contractors and governing organizations. Another mistake that homebuyers make is taking on more house than they can afford. A mortgage approval is essential, but it doesn't consider other expenses like health insurance and utility bills. After getting the approval and seeing what you can realistically afford, you will want to make a budget.
More Mistakes That Homebuyers Make
NextAdvisor describes other mistakes first-time homebuyers make, but experienced ones also fall down these holes. This source advises against buying a home when in debt because it can become an absolute disaster. This disaster is especially problematic if another significant expense like a hospital bill comes up. Putting down too low of a down payment can also be a problem since it increases the monthly payments. You should aim for 20 percent.
Many home buyers also make the mistake of rushing into purchases. If the house is priced right but in the wrong location or you need to borrow money for a down payment, it's usually better to wait. It's hard not to feel pressure, especially when a house seems perfect, but remember, there will consistently be other houses to look at. Homebuyers get pushed by other parties to make decisions, but you can step back and look at the situation objectively if you're feeling undue stress.
Choosing the Right Location
You're probably familiar with the #1 rule of real estate: location, location, location. The Wall Street Journal explains that home buyers often fall in love with homes and don't research the surrounding areas. With the current housing shortage, people are less picky than in the past, but who wants to live on a busy street with planes constantly flying overhead, not to mention a poor school district? Remember, it's easier to renovate a house than to remove it from its location and plant it down somewhere else! Even though many buyers purchase homes unseen in person, it's always best to do a physical walk-through first to experience its layout, features, and neighborhood.
Wall Street Journal also advises against waiving home inspections, even though it can make offers more appealing to sellers. Who knows what hidden secrets a house could have, and you don't want to have buyer's remorse when your home needs a new roof or has severe cracks in its foundation. Another thing to watch out for is a homeowner's association. If the neighborhood has one, find out all the details. The fees might be very high, and there may be restrictions if you want to renovate the home.
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