Avoid These Home Buying Mistakes As A First-Time Buyer
Are you looking to buy your very first home but worried that you are going to make a big mistake with one of the biggest purchases of your life? If so, you should know these potential mistakes that you can make along the way.
Basing Your Budget On The Home Qualification
When you get pre-qualified for a loan, the lender is going to tell you how much your pre-qualification is for. However, know that this should not be the upper limits of your budget. A lender is going to qualify you for the most that they are willing to lend you, which likely doesn't match your personal budget. You must factor all of your monthly expenses and how a house payment works within your budget. If you buy a home that is at the upper range of your home qualification amount, you won't have money left over for an emergency fund, home repairs, and other monthly expenses that come up over the years.
Using All Your Savings For The Down Payment
It is important to have a large down payment when you buy a home, which helps lower your interest rate, removes paying private mortgage insurance, and can qualify you for a conventional loan. However, you do not want to use all of your savings for the down payment. It is important to still have an emergency fund on hand in case you need it, especially since owning a home can have a lot of unforeseen costs. Make sure that you have a big enough of an emergency fund that makes you comfortable moving forward after buying the home.
Forgetting To Establish A Timeline
You'll want to make sure that you fully understand the timeline for purchasing a home so that you have realistic expectations. This starts at the process of pre-qualifying for a mortgage, continues as you look at homes, and includes the events that take place after you are under contract. This is crucial if you are looking to move at a certain time of the year, such as during the summer when kids are between grade levels, so that you don't start the process too late. For example, if you are looking for a home before you even get pre-qualified, you may lose out on a home because other buyers are ready to move in with the right documentation to show that they can afford the home at the offer they made.
Reach out to a real estate agent for more help in finding a home.
