Congratulations! You’ve decided to buy a house!
Buying a house is fun and exciting, but it also requires a lot of responsibility. Most rookies in the housing market make the same mistakes for you to learn from. Here are 5 first-time home buyer mistakes to avoid.
First-time Home Buyer Mistakes
Let’s talk about rookie mistakes. We all get nervous when the rookie quarterback gets put in the game. Mistakes are bound to happen.
The same thing can happen when buying a home for the first time. This list will help you avoid any frustrating mishaps or setback.
We want your first home buying experience to be a positive one, so listen up.
1. Know Before You Go
One of the biggest mistakes when buying a home is not knowing what you can afford.
What you can afford and what the bank says you can afford are not always the same thing.
Make a budget of all your monthly expenses. Don’t forget car payments, loan payments, groceries, spending, and savings.
Also, add any yearly expenses such as vacations or insurance premiums. You want to have enough to cover these bigger expenses when they come up.
From there you can figure out how much you can spend on your mortgage payment each month. When calculating, use a mortgage calculator to give you an estimate of what your mortgage will be with the current interest rate.
Once you know how much you can afford, you can spend your time looking at houses within your budget. This will give you a realistic idea of the kind of house you can buy.
2. Get Pre-Approved
Seller’s are always more willing to work with buyers who have been pre-approved.
If you have poor credit or irregular income it can be hard to get banks to work with you. Make sure you have a lender ready to go before you make an offer on a house.
Being pre-approved is often based on loan to debt ratio. This means they will look at all your current debt. Once you are pre-approved, it’s important to try to keep your debt low. This means you shouldn’t go buy a car, stack up a lot of credit card debt, or switch jobs while you are in the process of buying a home.
This could cause the deal to fall apart at the last second causing you to forfeit any deposit or earnest money you have paid. You’ll also waste the seller’s time, the agent’s time, and your time.
3. Ownership is Not Cheap
I hate to burst your bubble, but owning a home often has additional expenses that come with the cost of ownership.
Did you know that the process of buying a house is expensive? The buyer is responsible for the closing costs, appraisal fees, and escrow fees.
You’ll be responsible for homeowners and property insurance, paying property taxes, utilities, and making repairs that the house needs. Furnace goes out? That’s your expense. Need new sprinklers? Be ready to channel your inner DIY landscaper.
4. Don’t Be a Picky Penny
We get it, you have goals, visions, and dreams when it comes to your new home. Unless you have won the lottery though, you’ll need to be realistic when it comes to buying a home in your budget.
This means you may not get the newest and trendiest kitchen or the intricate finish work in the family room.
First time home buyers often need to compromise. What is more important to you? A secluded location or a third bedroom?
It’s good to know what you want, but you also need to have priorities. What are the three things most important on your list? Decide what are must haves and be willing to let the rest go.
Remember, you can change paint, countertops, and carpet over time. Adding an extra bathroom, or getting a bigger yard, are a lot harder to change if those are important to you.
5. Hire a Helping Hand
It can be tempting to try to buy a home on your own. How hard can it be to find a house you like and make an offer?
Once you are shopping for a home, it’s best to find an experienced Realtor who can walk you through the process. We can help you find lenders, get prequalified, and negotiate the price in your favour.
We can save you from making any rookie mistakes. Having a realtor on your team will save your time and money.
Buying a home is an exciting time. Nothing makes you feel like a real adult more than having a mortgage. Knowing some first-time homebuyer mistakes and how to avoid them helps you feel more confident and sure about the process.
Don’t hesitate to contact us if you need a reliable teammate. We’re here to help you avoid these first-time homebuyer mistakes!