Avoid these five big mistakes when buying your first home
Buying a home is often accompanied by anxiety, which is amplified for those seeking home ownership for the first time. It’s easy to get overwhelmed and easier to fall into a few common traps. Here are five potential mistakes you do not want to make. You will save yourself some significant stress on your home buying journey.
Mistake No. 1: Not understanding your down payment options. The biggest headache for so many first-time buyers is the down payment. A down payment of $4,000 to $5,000 might get you a head-start on a new car, but not so when buying a home. Most banks require at least a 20 percent down payment before they will waive the need for private mortgage insurance. There are loans available for as little as three percent down, and veterans could be eligible for zero-down loan programs with no PMI through the Veterans Administration (VA) loan program. There are other down payment options available. Please visit downpaymentresource.com for details.
Mistake No. 2: Between the amount of money you plan to put down on a home, the potential PMI and other cost factors, your monthly cost could be significantly more (or possibly less) than some of those calculators will show you online. So before you trust those “estimated monthly mortgage loan amount” numbers that you see popping up next to your potential new dream home, it pays to figure out what you can actually afford, and that means getting qualified for a home loan.
It’s a little painful, but you have to go through the process of meeting with a mortgage loan officer, completing a slew of documents, and getting credit scores and other items, but getting pre-qualified means sellers will take it more seriously when it comes time to put in an offer. Be careful when getting pre-qualified. You’ll need to pay homeowner’s insurance, taxes, perhaps flood insurance, etc. You don’t what everything to add up to more than you can afford.
Mistake No. 3: It’s so easy to find homes online these days that you may wonder why a real estate professional is even necessary. After all, isn’t the hard part – finding the home you want – something you can do yourself? Well, maybe. But the process of buying and selling a home is filled with hundreds of details that need to be planned for and navigated to a successful outcome. Not to mention areas with competitive markets where you’re probably not seeing the most updated listings, and the home you fell in love with online might be under contract before you even tour it.
A real estate professional will make sure you have access to listings the second they hit the market. A Realtor can provide details on the most desirable neighborhoods, insurance, amenities, challenges the area might have, and protect your best interests. Be sure to ask your agent lots of questions, such as what are the key attributes of the area, weekend activities, loan options and more. An experienced real estate professional can tell you what to expect at the end of the tunnel.
Mistake No. 4: Not spending the night in the neighborhood. If possible, try to find a vacation-rental type of setup where you can crash for a night or two, or preferably closer to a
week, so you can try your new neighborhood on for size. Is 8 a.m. a reasonable time to arrive at work considering the neighborhood’s commute time? You can also start navigating your way around public transportation or new routes to work so you know exactly what you’re signing up for. Where are the closest grocery stores, parks, rec centers, and hiking trails? Where can you walk your dog or enjoy the great outdoors. You should find out about stuff like this in advance before it’s too late.
What are the nighttime noise levels? Is there a train that runs nearby? Are you near an airport flight path? Do nearby highways and thoroughfares pose a noise problem, and are they a danger to children? You do not want to wake up in a new home to horrific noise. Also, check out where the bus lines and light rail stations are located.
Mistake No. 5: Not understanding what’s fixable and what a deal-breaker is. Those drop panels in the ceiling are hideous, and you can’t imagine how anyone can fit into that tiny bathtub. Are those annoyances that can be fixed or deal-breakers that mean you should pass on the property entirely?
This is another area where a good real estate agent can help. They see so many houses in various stages of repair and updating that they can show you where you can claim another foot or two for bathtub space (and help you figure out how much it will cost and who’s trustworthy enough to take on the job) or let you know that the ceilings are too low for any changes to make much of a difference. Realtors can also give you an idea of what’s up to code and what simply won’t pass an inspection, so you know what concessions to request as soon as you’re ready to make an offer.