Don’t be a newbie: Avoid these very common mistakes when buying your first home.
We’ve all bought things that we’ve later regretted! At least the money wasted wasn’t a life changer. But what if you paid too much for a car and then realized you couldn’t afford it? That can amount to a significant financial impact. Now just think about the home buying process which is more complicated than all those other purchases added together.
If you’re a first time home-buyer, buying a house can be very overwhelming. With an agent by your side to guide you through the process, you’ll make it through just fine — but you might want to be aware of these first-time homebuyer mistakes. If you’re searching for homes for sale in Merritt Island Fl or any Real Estate in Brevard, making one of these mistakes could end up costing you big time.
- Getting too emotionally attached
You’re about to purchase the most expensive item you’ve ever bought. So this advice may be easier said than done but just try to relax and don’t get too attached! There will always be another house if you lose one.
The best advice is to find several homes you really love so that you’re not too emotionally invested in one only!
- Finding the home yourself
We know you’re going to browse the MLS to find homes for sale in your desired location. But don’t rely on just your brilliant research skills. Finding your own home is like “diagnosing yourself of an illness.
Let your agent vet the homes for you. As a great Real Estate Agent like Matthew Stebbins of My House realty might find you properties that aren’t yet on the market. And of the homes that already on the market, Matthew should be able to tell you what the home looks likeinside and out, where it’s situated, the price per square foot, financing terms and other valuable information that you need to know.
- Assuming that you have no rules to follow as a homeowner
One of the draws of homeownership is freedom: getting out from under someone else’s rules, whether those of your parents or your landlord. But some homes have deed restrictions that come with conditions.
Deed restrictions vary, depending on the community you’re buying in. Their purpose is typically to ensure the property holds its value, which is a good thing. But if you have plans that don’t work with the community rules you won’t be a happy camper.
Obtain copies of the restrictions, read them, and look at the health of the condo or homeowners’ association. Look to see whether reserves are kept, the neighbors are paying their assessments, if there are pet restrictions, and whether you can run a business from the home. Rules are followed closely and you could receive fines for not following the rules.
4. Not saving enough money
If you saved up enough money to put down, pat yourself on the back…..you earned it! That’s a huge accomplishment! Unfortunately, it’s not the only cost of buying. “Transitioning from a renter or your parents’ home to your own home has incidental costs that usually get overlooked,” says Ayesha Thomas, associate broker with The Thomas Agency of Georgia.
Thomas suggests that buyers should have two to three months’ worth of mortgage payments in reserves. You would also be paying closing costs (between 2% and 5% of the home’s price) and property taxes. After moving day, you’ll also need to buy needed household items that you’ve never had to worry about before, such as appliances, tools, and paper towels supplies etc.
It’s recommended having three to six months of expenses saved up in an emergency fund. It is not money to buy new furniture or remodel a room but It has to be for the unexpected expenses, such as a leaky shower, new roof, new a/c, etc.
5. Not getting preapproved for a loan
You’ve run the numbers several times now and pretty much know what you can afford. That’s awesome!. But if you want your offer to be taken seriously by the seller, get proof of income and assets in the form of a buyer’s preapproval letter from a lender.
This process will take a few days. Getting preapproved shows that the lender has looked through your financial situation and is comfortable with the idea of lending you a certain amount of money
6. Paying private mortgage insurance (PMI)
If you happen not to put down at least 20%, you will have to pay PMI! Many first-time buyers pay this. If you do, make sure you notify your lender when you pay down your mortgage and owe just 80% of the home’s value. You will have to contact your lender to cancel your PMI when you owe 79.9%. You definitely don’t want to pay a month more of PMI than you have to!
7. Not checking the price of homeowners’ insurance
Buying a beach house is a dream come true for pretty much everybody! So, even though you may not buy that dream beach house but you bought that home on a canal, make sure you can afford to insure that home by the water because it could be very expensive! Being on the water, wind insurance can be expensive, and there’s a much higher risk of flood! Other factors may increase your insurance, such as if your new home has a pool, dogs on the property and more.
8. Not keeping track your credit score
Here’s an unbelievable trivia fact: About 42 million credit reports contain errors! There is a chance the error might be just a misspelling of your street name, which wouldn’t affect you. But some errors could hurt your score horribly, such as reporting that you have late payments when you do not.
Check your credit at least three months prior to house hunting! If there’s an error, ask the credit bureau to please fix it. The interest rate you will get greatly depends on it.
9. Not getting a home inspection
All homes need to be inspected, even brand-new ones. But some homebuyers skip this step because they get emotionally attached to the home and want it no matter what. If the home does have issues, you’ll want the seller to fix them or to lower the price. Someone has to pay for the issues to be fixed. That is not something that can wait.
If you’re first-time homebuyers, you might be a bit shy about asking the seller to fix that stuck window or leaky faucet. Most times when buyers who ask for more often get it! So don’t be afraid to speak up and get issues fixed before you sign the closing papers.