About 6.12 million homes were sold in the U.S. in 2021 – the highest level since 2006. Going by the projections, and with people like you looking to snap up homes, 2022 will likely be just as hot.
Buying your first home is exciting but nerve-wracking. You can’t wait to start house hunting but also you’re probably wondering about getting your mortgage approved or finding the right home at the right price. When you’re in such a state of mind, it’s easy to make a costly mistake.
Avoiding first time home buyer mistakes is key to having a good home buying and homeownership experience. Read on for a brief overview of common mistakes to avoid.
1. Failing to Get Your Financial Ducks in a Row
The median price of a home in 2022 is $384,000 – a 7.9% increase from 2021. Home prices have been on the rise, which means buyers have to dig deeper into their pockets.
Many first time buyers fail to do a proper assessment of their personal finances before stepping into the market. You might be in a position to pay for the house you’re looking to buy, but you must also factor in other related expenses as well.
For example, you’ll need to purchase homeowners and possibly flood insurance. There are routine maintenance and repair costs. These expenses can significantly drive up the cost of homeownership, which can ruin your financial health if you didn’t plan for them.
If you’ll be going in for a mortgage, ensure your credit score meets the minimum requirements for the type of mortgage you want. A higher score is better because it’ll increase your chances of getting the best mortgage rates.
2. Not Shopping Around for Mortgage Quotes
Getting pre-approved for a mortgage is an important step when you’re looking to buy a financed home. Although a pre-approval doesn’t guarantee that the lender will approve your mortgage application, you shouldn’t skip it – a mistake some first time buyers commit. Without a pre-approval, it’s difficult to know how much house you can afford to buy.
Don’t seek mortgage pre-approval from just one lender. Get multiple quotes and compare the terms. If possible, hire a mortgage broker to help you find the best lenders and choose the best offer.
3. Not Having a Clear Picture of the Kind of House You Need
You already have a rough idea of the house you’d like to buy. Maybe it’s a 2-bedroom condo. Or a 3-bedroom single-family house.
That’s a good start, but what you need is a clear idea; otherwise, you’ll find so many options in the market that you could end up settling on a property that’s the last thing you need.
Write down everything your new house must have before you start house-hunting. If you come across a house that falls short but has beautiful additional features you wouldn’t mind, move on. Don’t compromise.
It’s advisable to hire real estate professionals, like this Royal LePage franchise, to help you with house hunting.
Don’t Make These First Time Home Buyer Mistakes
Buying a first home, whether it’s a starter home or a forever home, is a big step, financially and even emotionally. You cannot afford to go into the process unprepared. If you can avoid the first time home buyer mistakes fleshed out above, you’ll give yourself a good chance of getting the right property.
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