Buying a home for the first time is one of the most exciting experiences of adult life. Nothing compares to owning your first home and getting your first real taste of freedom.
When you own your home, you can do whatever you want with it. If you take good care of it, your home will also build positive equity, which will pay off in the future.
However, there are a few first-time homebuyer mistakes you should watch out for. Investing in the wrong home could be a decision that haunts you for years to come.
We don’t want to see that happen to you. Keep reading to learn about some of the most common homebuyer mistakes you should avoid.
1. Not Getting Preapproved for a Mortgage
For most people, buying a home means taking out a mortgage. However, some people make the mistake of shopping for homes before they know their home loan eligibility.
You need to get preapproved for a mortgage for two primary reasons.
First, a pre-approval tells you exactly how much money you can afford to spend on a house. Second, preapproved offers on homes carry a lot more weight to sellers. Check out these certified brokers to start your pre-approval process today.
2. Not Understanding the Costs of Owning a Home
One of the worst first-time homebuyer mistakes is not knowing how much buying and owning the home will cost in the long run. Being able to buy a house isn’t just about taking out a mortgage and making monthly payments. There are several other costs you need to account for, such as:
- Realtor fees
- Closing costs
- Inspection and appraisal fees
- HOA fees (if applicable)
- Services and utiliteis
- Property taxes
- Home repairs and maintenance (about 1% of the home’s value per year)
- Homeowner’s insurance and home warranty coverage
- And more
Make sure you calculate all of these expenses while determining your budget.
3. Not Getting an Appraisal and Inspection
A lot of first-time buyers attempt to save money any way they can. While there’s nothing wrong with being frugal, you should never try to save money at the expense of your long-term happiness.
For example, don’t skip the home appraisal or inspection process. A home inspection will help you identify any home issues or damages that will lower the value of the home. You can request the seller make repairs or lower their price if anything comes up.
An appraisal is an official valuation of the home in its current condition. If it comes back lower than the seller’s price, you can submit a lower offer.
4. Sabotaging the Closing Process
Finally, one of the most devastating first-time homebuyer mistakes is making financial changes in the middle of the closing process. This can alter your home loan eligibility and disqualify you for the mortgage.
Financial changes include:
- Starting a different job
- Buying a new car
- Charging up a credit card
- Taking out a personal loan
Any changes to your financial status could disqualify you for the loan. At this point, you will be back at square one and the seller will probably find a new buyer.
Looking to Avoid First-Time Homebuyer Mistakes?
If you’re ready to buy your first house, pay attention to this article. Avoid making the first-time homebuyer mistakes listed above to ensure your happiness.
And if you’re looking for more homeownership advice, real estate tips, or financial guidance, you’re in the right place. Stick around and read through some of our other articles before you go.
- About the Author
Alex Grigoryan is a Professional Home Improvement and Lifestyle Writer. He has been in the industry for over 6 years and has been writing for Chique Home Living since 2019. His work has been featured in prestigious blogs such as Spruce Home, Better Homes & Garden, and more.