Avoid These Common First-Time Home Buyer Mistakes

Avoid These Common First-Time Home Buyer Mistakes

  • Roger Banning
  • 06/18/23

Purchasing a home for the first time is both scary and exciting. With the right team behind you and some research of your own, you can be confident as you move through the stages of your transaction. Deciding on buying a home often takes months and, in many cases, years of financial planning.

Those that are buying for the first time should research every aspect of the process to ensure that their interests are being protected. From assistance programs for first-time home buyers to saving up for the down payment, you should prepare and seek help from industry professionals. Keep reading for some home-buying tips and information for first-time home buyers.

Keep saving your money

While some can make their purchase in cash, others require financing to make their purchase. If you fall into this second category, then you should continue to save even after you think you have enough. The downpayment for your new home will be directly related to the sales price and your loan amount, but there are additional fees to consider.

There could be closing costs that you agree to pay to entice someone to accept your offer in this seller’s market. You should also have a couple of months of your mortgage payment and utilities saved away in case your primary income stream is interrupted. Even the cost of moving your belongings into a new home and making improvements to the space will begin to add up, and having a rainy day fund stashed away will surely come in handy.

Check your credit score

As you are saving your money for this big expense, you will want to ensure that your credit score is up to par and that you pay off any debts that could be holding your score down. Your credit score is very important when it comes to obtaining a mortgage, and knowing that your finances are in order will offer peace of mind.

Another stage of the home-buying process is getting pre-approved for a loan amount, and the better your credit score, the better your interest rate. With a better interest rate, your payments over the years will be lower, allowing you to save more of your money to put toward your next investment.

Shop around for good rates

In between putting your finances in order and getting pre-approved for a loan, you should remember that it is important to shop around when looking for good interest rates. Your interest rate will affect your payments for years to come, and if you are able to find a better deal somewhere else, then you should not hesitate to jump ship. Similar to finding an agent and touring houses, you should be able to walk away from something that does not work for you.

Getting pre-approved

Once your finances are in order, you should get pre-approved for a loan. After you have shopped around and compared interest rates available to you, the financial institution that you choose can provide you with a pre-approval letter. As you shop around for a home and eventually make an offer, including your pre-approval letter with your offer will show the seller that you are serious about buying. Once an offer is accepted, the ball will roll quickly, seeing as your financing is in order.

Mind your budget

Once you set a budget, you should stick with it so that you do not overextend yourself when the monthly mortgage payments begin. If you have factored in car payments, student loans, and monthly grocery expenses, you will want to keep a level head with touring properties. Your agent should be only showing you homes within your budget, but if you are enticed by a property out of your price range, then you need to remind yourself of the other financial commitments you have made. Utilities and property taxes are just a couple of reasons why you should create a budget and stick with the plan. You also do not want to spend all of your savings, and make sure you have funds saved for any unforeseen problems during the first few months of living there.

The home inspection and appraisal

With the housing market tipped in favor of sellers, you may be tempted to waive a home inspection to win the bid. While some lenders or assistance programs do not allow appraisals or home inspections to be waived, others are in a position where they can waive these costly and time-consuming steps to get under contract.

For first-time home buyers, you will want to ensure that your experience is a positive one and have your future home inspected for any damage or foundational problems. If the sellers are pushing to waive these steps, this could point to problems with the house or just an eagerness to move out, but you should always consult your real estate agent before agreeing to anything.

First-time home buyers' assistance

There are programs available for first-time homebuyers that will lower the amount that you need to bring to the table. If you had not previously considered taking advantage of this benefit, then think again because you can only purchase for the first time once! With a smaller downpayment, you can put more money towards making your dream home even dreamier and have more money set aside for bills that start coming just a few weeks after moving in.

Work with an agent

One of the best things you can do for your real estate transaction is work with a reliable agent that will guide you to the closing table while keeping you informed and protecting your financial interests. As you consider the Fountain Hills, AZ, real estate, homes for sale in Grayhawk, Scottdale, and the Paradise Valley homes for sale, you will want to ensure you are working with a competent agent that is skilled in their profession and knowledgeable about the area that they serve.

Roger Banning has years of experience representing clients in Arizona, having aided both buyers and sellers with real estate of every caliber and quality. Call Roger today to get started searching for your dream home.


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