First-Time Home Buyers Should Avoid These Mistakes

Posted on: 23 November 2020

There are so many decisions involved in purchasing your first home, and because this is such a large and lifelong investment, you do not want to make significant mistakes that will cost you later. When it comes to buying a home, the more you know, the better off you will be. So, here are a few mistakes that you must avoid when buying your first home.

Applying for a Mortgage After Looking at Houses

When you want to buy a house, it isn't at all uncommon to start looking at properties. However, this is a mistake. It is always better to sit down with a mortgage lender before you actually start looking at homes. This is particularly true if the housing market is tight, meaning that there are fewer homes available than there are buyers. If you are not pre-approved, the home you want could easily slip through your fingers while you are trying to get loan approval. Alternatively, you could be looking at homes that you can't even afford. Therefore, make sure you speak to a lender and get a pre-approval letter before you search the market.

Speaking to and Settling on One Mortgage Lender

Because first-time buyers are not well-versed in the housing industry, they will often take the first mortgage offer that they receive. Unfortunately, this is a huge mistake. More often than not, you are likely to receive a better offer from another lender. Just as you would shop around for contractors to work on your house or auto insurance, you should also do the same for home loans. Ideally, you should speak to three lenders so that you have the loan terms, rates, and fees to compare them all. This will allow you to determine which lender is the best one to do business with.

Buying a House That You Cannot Afford

It is easy to fall in love with a house that is more expensive than you can actually afford. Unfortunately, this increases your risk of foreclosure later down the road. In addition, it puts you at risk of not being able to pay your other bills on time each month. When you receive your pre-approval letter from the lender, it is important that you understand you may not be able to afford the monthly payment that comes with the maximum loan amount that you are approved for. Therefore, you will want to take a close look at your finances and ensure you can afford the house you are buying at the end of the day.

For more information, contact a mortgage lender near you.