1. There is More to it Than Just a Mortgage Payment
Many first time homebuyers decide to buy when they feel ready to take on a mortgage payment. BUT, just because you can afford a mortgage payment, doesn't mean you can afford to own a home. You may have an idea of what your mortgage payment is going to be, but don't overlook the HOA fees (do they have the potential to increase over the years?), maintenance, property insurance, and property taxes. It is important to keep in mind that all of these expenses have the potential to increase over the years, so make sure that just because you can afford it now, can you afford a possible increase?
2. Looking for a Home First and Applying for a Loan Later
Unfortunately, this is working backwards and doesnt work in the Real Estate world. Home buying begins with a mortgage prequalification or approval. Not only is this the first step in order to not waste your time, the seller's time, and your Realtor's time, it gives you leverage and confidence. For example, imagine walking into a beautfiul home that is just perfect for you and you are ready to make an offer, but you havent been prequalified yet. You call a mortgage broker and he tells you "unfortunately you have two lines of credit you need to pay off in order to bring your debt down before you can be approved." There goes your excitement, the home, your time, the sellers' time, and your Realtor's time. Now you are back to the drawing board. Now, imagine walking into a home, it is absolutely perfect for you and you decided you want to make an offer. Luckily, you have already been preapproved so your Realtor is able to put in the offer THAT NIGHT!! Your confidence and excitment has got to be soaring. So, the first step is getting preapproved AND THEN you look for a home. This way you are making a financial decision and not an emotial decision.
3. Not Getting Professional Help
Did you know that when you use a Realtor to assist in your buying process, they are absolutely free to you? Yes, the seller actually pays your Realtor for bringing you to them. You will need a REPUTABLE Real Estate Agent, a trusted mortgage broker or loan officer, and perhaps a lawyer. Venturing into the homebuying process alone is not a good idea. There is a lot that goes in to the purchasing process that a lot of people don't realize--timelines that need to be met in order to protect yourself legally and financially, negotiating, specific addendums and documents, etc. It is beneficial to have a REPUTABLE Realtor on your side.
4. Using Up Your Savings on the Down Payment
Spending all or most of your savings on purchasing the home is the biggest mistake you can make. Imagine if something were to go wrong after you move in..unfortunately things happen that are out of our control...what money would you use to replace that AC? Your down payment money should be the extra money you have saved up to purchase, not your savings account for rainy day emergencies!
5. Getting New Loans Before the Deal is Closed
DO NOT BUY ANYTHING. Okay, I am exaggerating..you need to eat and buy everyday things, but that beautiful car you want, don't even think about it. That credit card you want to open for your new vacation so you can get traveling points, absolutely not. That line of credit you want to open at Target because the Cashier sweet talked you in to saving 5% on your purchase, no way Jose!! You better avoid Target like the plague if you are going to get suckered into it!
The homebuying process can be a really great experience if you have a Realtor who will advise you, guide you, and teach you. Don't do it alone! It can be stressful because things do come up, BUT when you have a Realtor on your side, they will take care of all of this for you!!
If you are interested in purchasing, CALL ME! I would love to assist you! 239-994-3681