Buying your first home involves many important decisions that may be as thrilling as they are terrifying. It’s easy to get caught up in the frenzy of house hunting and make mistakes that might lead to buyers’ regret later. If this is your first time buying a house, or if you haven’t bought one in a long time, information is power.
Five Mistakes First-Time House Buyers Make
- Buying More Homes Than You Can Afford. Without knowing how much house you can afford, you might waste time. You could end up looking at houses that you can’t afford yet, or visiting homes that are below your optimal price level. For many first-time buyers, the goal is to buy a house and get a loan with a comfortable monthly payment that won’t keep them up at night. Sometimes it’s a good idea to aim low. Use a mortgage affordability calculator to help you know what price range is affordable, what’s a stretch, and what’s aggressive.
- Not Getting Preapproved For a Mortgage. Before you start looking at properties, you should get preapproved for a mortgage. This gives you a sense of what you can afford, and it shows sellers and real estate agents that you’re serious about buying. Getting preapproved for a mortgage typically involves submitting information about your income, your debt, and your assets. You should get preapproved for a mortgage whenever you get serious about buying a house.
- Saving for a Down Payment Only. Most of your home savings objectives will be met by your down payment, but it is not the only expenditure to consider. When you buy a property, you will be responsible for any closing charges. Closing costs may comprise the following items:
- Down payment — at least 3% of the home’s purchase price
- Loan origination fees — 1% of the home’s purchase price
- Title insurance — varies by location
- Homeowner’s insurance — 1 year of premiums
- Private mortgage insurance — up-front premium or monthly payments
- Property tax — 6 months
- Escrow fees — 2% of the home’s purchase price
You should also save money for your move-in expenses. Professional movers may charge only a few hundred dollars. You could also want to put up a fence or get new kitchen appliances.
- Ignoring VA, USDA, and FHA Loan Programs. For eligible Veterans, Active Duty Service Members, Reservists, and National Guardsmen, the Department of Veterans Affairs offer a special loan program. For eligible first-time home buyers, the Department of Agriculture offers the USDA loan program, which is particularly useful for rural areas with limited housing inventory. The Federal Housing Administration is another government loan program. Each of these loan programs may have special perks. For example, the USDA loan program allows you to borrow 95% of the home’s sale price.
- Not Checking Credit Reports. Credit reports indicate how well you’ve managed your credit history. They also indicate how well you manage money. A credit report is a collection of your credit activity. This includes your credit applications, your payment history, and even your work history. Your credit report gives a comprehensive look at how well you manage finances.Check your credit report before applying for a house loan. You can check your credit report for free once a year.
Buy A Home in Roswell with Buckhead Home Loans
These are just some of the mistakes that first-time homebuyers make. By avoiding them, you can save yourself time and money. If you are ready to quickly and easily apply for a home loan in Roswell or anywhere in the Southeast region, the Buckhead Home Loans Team is ready to assist you through the process. Please give us a call today at (404) 303-7411 to schedule your consultation. We have offices in Roswell, GA, Pensacola, FL, and Lake Wylie, SC, and work with home buyers and homeowners throughout the states of Georgia, Florida, Alabama, North Carolina, and South Carolina.