It’s easy for first-time homebuyers to feel overwhelmed when shopping for a new home. The process is both a learning experience and waiting game that sometimes comes with a few speed bumps along the way. There are common mistakes that educated buyers could and should avoid to ensure that their process is nothing but a smooth one.
First thing’s first-if you’re ready to buy a home, don’t wait for the market “to improve.” No one can predict the future, so if you decide to wait it out, you may be waiting a while. If you’re financially and mentally ready, jump on in. Anytime is the right time to begin your new life.
Educate yourself on the process including the different loan types and items that contribute to the total cost of securing a loan. Learn about fixed-rate and adjustable-rate mortgages, and also FHA and VA loans. The more information you learn, the easier time you’ll have piecing everything together. In-depth information can be found on the Department of Housing and Urban Development’s website, www.HUD.gov.
It’s time to get your finances in order. Get a copy of your credit report to find your credit score. If your score is low, take time to improve it before going further in the process. (According to Fannie Mae, anything below 620 is considered “low”.) Once finances are set and you have a workable score, don’t forget to get a pre-approval. Your lender will gather information about your job, assets, income and debts and then tell you how much financing you are eligible to receive. Knowing this information will help you avoid high hopes on pricier properties. With this recommended mortgage, you’ll know what you can afford which is essential information to have before looking at houses.
When you finally get to looking at properties, don’t fall in love at first sight. See lots of homes and do multiple comparisons before getting serious. It’s definitely an exciting time, but a stern demeanor along with patience helps maintain rational. By seeing more houses, you’ll feel confident in your final decision and rid yourself of wondering if the grass would’ve been greener on the other side.
Before committing to buy, never fail to have a professional inspector look over the house. Even if everything appears perfect, inspectors can find problems that most potential buyers wouldn’t even think about looking into. Be at the house while the inspection is conducted so you can receive the feedback straight from the horse’s mouth.
When you find a solid choice and decide that it’s time to make a bid, don’t jump in without protection. Never make a bid without a backout plan. If the home didn’t appraise for the purchase price, has an irresolvable flaw or your lender refuses to provide your loan, it’s always smart to have a plan to fall back on. To put it simpler: would you spend hundreds of dollars in a store having no return policy? Then why would you lay thousands of dollars on the line without the right to cancel the transaction.
There are wonderful options in the world of foreclosures, but don’t get involved until you do some significant research. Sure, the low purchase price has got your mind reeling, but have you thought about the monetary figures involved in the potential repair work? Will the repairs and renovations increase your property value in the long run? If not, a foreclosure might not be worth all of the money you’ll undoubtedly be dumping into it.
Another blunder to avoid: don’t forget to plan for the long-term. Buying a home is a big investment, and you should be thinking years ahead of the purchase date. Think about a house’s resale value. Is it in a good location? Does it have plenty of storage space? Central air? You want to be comfortable with your buy, but you also want to have additional confidence in its selling ability.