5 First-time homebuyer mistakes you should avoid
BY READERS DIGEST
6th Apr 2021 Property
Buying your first house is one of the most exciting milestones in your life. This is the moment you’ve been working hard for, and it’s finally time to start looking for the best property. However, keep in mind that all this excitement can and will make you more likely to commit first-time homebuyer mistakes.
After all, buying a house is a complicated and stressful process.
If you’ve never done it before, you’re bound to find yourself in a tricky situation. Here are the 5 most common mistakes you should avoid during this process to ensure everything goes as smoothly as possible.
Looking at Homes Before Applying for a Mortgage
The most exciting part of buying your first property is when you get to go around and look at homes on the market. Every first-time homebuyer wants to start exploring homes as soon as possible, but you can’t just skip all the boring parts that come first. In other words, you must first apply for a mortgage. Looking at homes before getting things sorted with your mortgage lender can only set you up for disappointment.
Some markets are so competitive that you can easily lose the property if you aren’t pre-approved for a mortgage. Therefore, make sure to get that approval before you start looking at homes.
Neglecting Your Credit
Before you start your journey, William Thai, founder and director at Mortgage Pros recommends learning more about the importance of credit in the whole process. As you may know, the better your credit score, the higher are the chances that you will get approved for a good loan at lower mortgage interest rates.
Having a good credit history gives you a better chance to qualify for the best loans. Therefore, make sure to keep your credit score in mind and start working on improving it as early as possible. Some loans have very specific credit score requirements, so you might have to work on that before taking the next step.
Not Calculating Full Homeownership Costs
There’s a lot that goes into owning a home that many buyers seem to neglect at first. Inexperienced buyers only keep their eyes on the price of the property. In reality, you are going to spend way more money on closing the first deal. There are many hidden costs of homeownership that no one tells you about until you start digging into the process. These costs include the closing fees, insurance, property taxes, utilities, maintenance, and homeowners association fees. All of these expenses can add up to quite a large sum of money.
Not Using Your Time with the Lender to Ask the Right Questions
We understand that you want to get to the exciting parts of the process as soon as possible, but it is important to take your time to work with your lender. Instead of rushing the process, make sure to answer all the questions that come to mind.
You might also want to prepare your questions in advance to make sure you don’t miss out on any important information. Some of the most common questions you should go through are related to interest rates, lender fees, minimum down payments, pros and cons of different loans, and the entire loan process’s length.
Settling on a Loan too Quickly
This mistake is another result of being way too excited as a first-time homebuyer. Before you start looking at homes, you should familiarize yourself with all types of loans that will be offered to you. Many buyers jump at the first opportunity without even looking at other options.
You can look up and apply for different loans online. For example, a good solution would be using a VPN UK for any online transactions or activities that include sharing sensitive information. It’s a simple way to secure your internet connection and stay safe. Cybersecurity is more important than ever before, so try to protect valuable information.
Celebrate Your First Property
If the time has finally come, you have the full right to celebrate this great milestone in your life. Buying the first home is a huge step, and it shouldn’t go unnoticed! Take some time to think about all the options you have and then make the right decision. This process might take some time, but you will definitely be happy once you’re in your new place.
However, make sure to be responsible for the whole process - don’t neglect the less exciting parts because you will likely make one of these common first-time homebuyer mistakes.
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