SHARE
FACEBOOK
TWITTER
LINKEDIN
PINTEREST
mistakes

Mistakes First Time Home Buyers Can Avoid

Learn from experiences, right? Well it’s not often that you move and buy a new home so take some advice from those who help with the process and are familiar! These are some of the most common first time home buyer mistakes according to Bankrate!

 

1. Looking for a home before applying for a mortgage

Many first-time buyers make mistakes and view homes before ever meeting with a mortgage lender. This puts you behind the ball if a home hits the market you love, or you look at homes that you can’t afford.

What to do instead: Being preapproved sends the message that you’re a serious buyer whose credit and finances pass muster to successfully get a loan.

2. Talking to only one lender

This one is a biggie. First-time buyers might get a mortgage from the first (and only) lender or bank they talk to, potentially leaving thousands of dollars on the table. The more you shop around, the better basis for comparison you’ll have to ensure you’re getting a good deal.

What to do instead: Shop around with at least three different lenders, as well as a mortgage broker. Compare rates, lender fees and loan terms. Don’t discount customer service and lender responsiveness; both play key roles in making the mortgage approval process run smoothly.

3. Buying more house than you can afford

It’s easy to fall in love with homes that might stretch your budget, but overextending yourself can lead to regret and worse later. It can put you at higher risk of losing your home if you fall on tough financial times.

What to do instead: Focus on what monthly payment you can afford rather than fixating on the maximum loan amount you qualify for. Just because you can qualify for a $300,000 loan, that doesn’t mean you can afford the monthly payments that come with it. Factor in your other obligations that don’t show on a credit report when determining how much house you can afford.

4. Moving too fast

Buying a home can be complex, particularly when you get into the mortgage process. Rushing the process can cost you later on.

What to do instead: Map out your home-buying timeline at least a year in advance. Keep in mind it can take months — even years — to repair poor credit and save enough for a sizable down payment. Work on boosting your credit score, paying down debt and saving more money to put you in a stronger position to get preapproved.

5. Draining your savings

Spending all or most of their savings on the down payment and closing costs is one of the biggest mistakes first-time homebuyers make, says Ed Conarchy, a mortgage planner and investment adviser at Cherry Creek Mortgage in Gurnee, Illinois.

Homebuyers who put 20 percent or more down don’t have to pay for mortgage insurance when getting a conventional mortgage. That’s usually translated into substantial savings on the monthly mortgage payment. But it’s not worth the risk of living on the edge, Conarchy says.

What to do instead: Aim to have three to six months of living expenses in an emergency fund. Paying mortgage insurance isn’t ideal, but depleting your emergency or retirement savings to make a large down payment is riskier.

 

Be sure to check out the full article to see all their tips to avoid common first time home buyer mistakes! And contact Maryland Elite Realty today for help in the home buying process!

IF YOU’D LIKE TO LEARN MORE ABOUT THE FREDERICK AREA, SEE OUR PREVIOUS BLOG POST ABOUT FREDERICK, MD. AND IF YOU’RE LOOKING TO MOVE TO THE FREDERICK OR SURROUNDING AREA AND WANT TO SEE WHAT IS AVAILABLE TODAY, CONTACT THE BAILEY GROUP WITH MARYLAND ELITE REALTY FOR HELP!

Cassandra Bailey

Cassandra Bailey

Cassandra: Cell Phone: 301-788-2549

Email: [email protected]

Val Ellis

Val Ellis

Val: Cell Phone: 301-606-6935

Email: [email protected]

Karen Sorensen

Karen Sorensen

Karen: Cell Phone: 240-409-3870

Email: [email protected]

 

 

 

image/svg+xml Top