5 First-time Home Buyer Mistakes to Avoid
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Looking for a new home is an exciting time! If you’re buying a home for the first time, it’s important to know the 5 most common mistakes made during the home buying process. More importantly, it’s vital that you know how to AVOID these mistakes!
1. Buying More House Than You Can Afford: It’s hard not to get caught up in the emotion of buying a new home. If you haven’t already applied for a mortgage, you’ll soon find out that you can qualify for a house payment that’s much larger than what you can really afford. This doesn’t make sense for several reasons. First, you’ll be strapped for cash every month and second, your home will become a burden instead of a blessing—not a fun situation to be in!
2. Emptying Your Savings Account: This is super risky. You don’t want to empty your savings account to cover your down payment and closing costs. It’s best to keep 3-6 months of living expenses in your account to cover any emergencies that may come up and keep your finances from spiraling out of control.
3. Thinking You Have to Put 20% Down: A higher down payment is always a good thing, but it might not always be realistic in today’s market. Don’t shy away from getting a mortgage just because you’re uninformed! You still have plenty of opportunities if 20% down is not an option.
4. Being Careless with Credit: Another mistake first-time home buyers make is to not pay attention to what’s going on with your credit score. If you’ve worked hard to make sure your credit score is 0, it’s always good to check in from time to time to make sure it’s staying that way. And if you’re trying to repair your credit, you need to know if you’re headed in the right direction!
5. Shopping for a Home Before Applying for a Mortgage: Many first-time home buyers make the mistake of looking at homes before talking to a lender. You want to have as much negotiation power as possible, especially if you live in a competitive housing market.