Buying a home is both exciting and stressful for first-time homebuyers. Keeping a level head when faced with a situation can help prevent buyers' remorse. As you become familiar with the home-buying process, you'll know what to expect and be better prepared to avoid many of the mistakes first-time buyers make. Staying on top of all things related to your home purchase is crucial. Here are eight common mistakes first-time homebuyers make, which you must avoid at all costs:
Not Getting Preapproved for a Mortgage
A mortgage prequalification is okay if you are just thinking about buying a house since it will let you know how much you might be able to borrow. Nevertheless, if you are serious about searching for a home, you need pre-approval from a lender to know what you can borrow. As a result, you will be able to search for homes within your budget. Pre-approval will demonstrate to the seller that your finances are in order if you want to make an offer on a house you love.
Applying with Only One Lender
For most first-time homebuyers, the temptation is to apply for a mortgage right away with the first lender they receive a quote from. If you want to get the best price for your mortgage, you need to compare mortgage quotes, including the interest rates and loan terms, just like you would for other products or services. Throughout your loan tenure, you could save a lot with a fraction of a percentage point.
Planning Expenditures Beyond Your Budget
Being preapproved for a particular loan amount does not necessarily mean that you should automatically include that amount in your home budget. Remember that you need to factor in all your costs each month, including home insurance, property taxes and energy bills.
Choosing Not to Use a Realtor
Most first-time homebuyers feel they do not need to get a house through a real estate agent. However, the best agent is always one with experience and works on your behalf. Your realtor does not charge you a commission. Sellers must pay them, which becomes part of the sale price. The truth is, you will not save money by not using an agent. In fact, it could cost you thousands of dollars and possibly, the house.
Taking Action That Will Negatively Affect Your Credit
You don't want to open or close a credit card account, purchase a car or do anything else that could hurt your credit score as you're preparing to purchase a home. Until you close your new home, make sure that your finances remain steady. Otherwise, you will not qualify for a mortgage.
Failing to Secure Gift Money Ahead of Time
Have you been promised a sum of money to put towards your down payment by a family member or friend? Before submitting an offer, make sure that you have it in writing. A gift letter and proof of the deposit or transfer are required by your lender before the gift money can be applied to the purchase of the real estate.
Prioritizing the Property Over the Location
The first-time homebuyer is often smitten with a house before examining the neighborhood. The location of a dream home can easily turn into a nightmare if it doesn't meet your needs. It is always possible to improve a home, but you are bound by its location.
Getting Caught Up in Emotions
It is possible to experience an emotional roller coaster during the home buying process. Accepting an offer on the house is a thrilling experience. You can get your hopes up for a house that, in the end, goes to someone else. Keep searching for your dream home and do not let your excitement or eagerness get in the way of making wise decisions.
Owning a home isn't always an easy process. Preparing ahead of time and conducting thorough research can help you avoid common first-time buyer mistakes. For everything else, you can always rely on Edmonton Home Pros for guidance in your home buying journey.Posted by Stephen Lau on