Buying your first home is a major accomplishment. It can be so exciting to daydream about owning a home and getting started with your search. But as a first-time buyer, there are many pitfalls that you may experience if you don’t know what to look out for. That’s why we’ve compiled this list of the most common mistakes to avoid as a first-time buyer. Follow these tips to ensure that your first experience with buying a home is as smooth and stress-free as possible!
Not getting pre-approved for a mortgage
The biggest mistake you can make is not getting pre-approved for a mortgage before you begin your home search. We’re in a competitive market for buyers, and you won’t even get your foot in the door with a seller if you aren’t pre-approved for a loan. Getting pre-approval shows a seller that they can take your offer seriously and that you’re more likely to be able to close on a loan. Without that pre-approval, you’ll be wasting valuable time.
Not shopping around for a mortgage
While you’re getting your pre-approval, you should be shopping around for a lender. A home is just like any other purchase in that you should compare deals before deciding on which one to use. There are many kinds of lenders out there and many kinds of mortgages. When you shop around, you’re ensuring you get the best deal with the best rates and terms.
Not knowing your budget
As a first-time buyer, it’s easy to get caught up in your dreams of homeownership. But be wary of those pie-in-the-sky visions you have. Buying a house you can’t afford will cause you all kinds of stress and headaches down the line. Instead, find out exactly how much house you can afford so you can look at homes that comfortably fit within that budget.
Not checking your credit report
Another potential pitfall you need to avoid as a first-time buyer is forgetting to check your credit report before you apply for a home loan. Your lender is going to look carefully at your credit report to determine whether or not you qualify for a loan. Before you apply for a loan, get a copy of your credit report and check it for errors. If you find any mistakes, then make sure they are removed before you begin your search. And if your credit score is lower than you’d like it to be, take steps to increase it before you apply. Aim for a credit score of at least 580, though it varies by lender. But know that the higher your score, the better loan terms you will get.
Getting caught up in your emotions
Finally, buying a home is an emotional decision, yes. After all, it’s where you’ll build a life and make important memories. But don’t forget it’s also a huge financial decision. A home is one of the biggest, if not the biggest, financial investments you’ll make in your lifetime. If you get caught up in your emotions, then you may end up paying too much. Try to keep those emotions in check. A trusted real estate agent can help to be your guide in these situations.