The home buying process can be extremely complicated and occasionally drawn out, even for shoppers who have been through it before. As a result, it's understandable that first-timers would have more difficulty in dealing with these issues, and can occasionally make mistakes. Fortunately, it doesn't have to be that way.
There are plenty of common mistakes among first-time buyers but most of those are extremely avoidable. Here are just a few:
Aiming too high
One of the biggest issues for first-timers is believing they can afford to buy a more expensive house than is reasonable based on their finances, according to NerdWallet. Before getting into the market, it's important to crunch the numbers, pay down debts, build savings and doing all the basic legwork of determining exactly "how much home" they can afford.
Trying to save up front
One of the ways in which people make a long-term mistake when buying a home is keeping the size of the down payment low just to get a sale completed, NerdWallet noted. While there are certain situations where that strategy makes sense, lower down payments lead to more interest charges in the future. While it may seem like a good idea to save a few thousand dollars now, one must keep in mind that the difference can add up to tens of thousands over the life of a loan.
Not getting pre-approval
One way for shoppers to avoid targeting homes that aren't actually affordable, and to expedite the bidding and sales process when they find something they like, is to get pre-approved for a mortgage, according to Investopedia. By doing so, they will know exactly how much credit lenders are willing to extend them, and really lock themselves into a deal that makes sense for them.
Overlooking other costs
Ongoing homeownership costs aren't just the mortgage itself, Investopedia added. They may also include mortgage insurance payments (which go away after a while), increased utilities costs in many cases, homeowners insurance and so on. Furthermore, buyers should always budget for the thousands of dollars they're likely to face in closing costs.
Not doing homework
While it's tempting to dive headlong into the market, finding a lender and real estate agent as quickly as possible, that's not a good idea, according to U.S. News and World Report. It's always a good idea to shop around for the best possible deal on a home loan, and to find agents who have experience helping people in similar situations find something that works.
Falling in love with a home
Finally, people who really get excited about buying a specific home may get themselves into trouble when it comes to overbidding, U.S. News and World Report pointed out. Especially in today's market, most homes for sale are going to receive a lot of attention, and it can hurt for sellers to go with another shopper's bid. Unfortunately, that's life in today's real estate sector.
Working with a qualified and experienced real estate professional will help first-timers avoid these common pitfalls, and the same is true of finding the right lender.
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