Making mistakes is normal when buying a home for the first time. We can, however, learn from the mistakes that other first time home buyers have made in the past. Some of the errors and how to avoid them are discussed as follows.
Many people fail to realize how much house they can afford. They start shopping for homes that are not within their means. This can make you waste a lot of time. You don’t want to fall in love with a house that you cannot afford since this can lead to straining financially. Only visit homes that are within your budget to avoid disappointments. You should buy a house that you can afford to pay for. If you are taking a loan to pay for the house, you should be able to make monthly payments without struggling. Before you start shopping for houses, make use of the mortgage affordability calculator to find out the price range for an ideal home. Once you deal with this, you can make use of sites such as real estate by gary to find the right home.
Most homebuyers do not take the time to shop for mortgages. Since the mortgage interest rates differ from one lender to the next, you need to get more than one rate quote. Try to apply with more than one mortgage lender so that you can save on interests. The lack of checking credit reports and rectifying errors is also a common mistake among first time home buyers. Since a mortgage lender has to scrutinize your credit report, you need to check it before applying for the home loan. If your report has any errors, it can lead to high mortgage interest rates if you don’t correct them before the lender looks at it. Ensure that your report is accurate by downloading it early enough and reporting any errors to the credit bureau.
Though the minimum down payment is 20%, you don’t have to put down this much. Though some programs allow home buyers to put down even 3%, saving a considerable amount as the down payment is wise. This can help you pay less interest rates on the mortgage every month. Some people are in a hurry to buy homes that they put down a small amount as the down payment. If you don’t want regrets in the future, you should consider waiting until you have saved a substantial amount for the house. If you intend to purchase a home that was previously owned, you should save enough for unexpected expenses. Some things may need repairs, and the lack of having funds to fix them after buying the home can be quite stressful.
Some people also make the mistake of applying for credit before getting the mortgage. The period between your loan application and closing is quite critical. Do not try to get a new credit card before the mortgage loan closes. This can reduce the chances of getting approved for the loan. It can also lower your credit score with a few points.