Buying a home for the first time can be an exciting experience. However, it can also cause major anxiety and confusion. Below, our Sanford real estate lawyer discusses the six most common mistakes first time homebuyers make – and how to avoid them.
1. Spending More Than You Can Afford
Many first-time home buyers make the mistake of looking at homes without first giving consideration for their budget. They may convince themselves that they can make adjustments to their budget to afford the house they toured and loved. This can cause them to get over their heads quickly and an unexpected event like a job loss or illness can quickly cause them to get behind on their mortgage and jeopardize their property interest. Spending too much may also cause them not to have a large enough down payment, which may cause them to have to pay for payment protection insurance, further stretching their budget.
You can avoid this mistake by getting preapproval from your home lender and calculating your monthly mortgage payment and related costs at different price points. This way, you can look for a home with a price tag attached to a payment you can afford. You do not have to buy a house for the maximum that you were approved for.
2. Not Shopping for a Mortgage
Some homebuyers make the mistake of going to their local bank and accepting whatever rate they offer. However, shopping around for a mortgage can give you access to better rates and terms. It also allows you to negotiate with lenders to secure the best deal. However, be sure that you factor in all costs that will affect your total borrowing cost, including:
- Mortgage payment
- Term
- Interest rates
- Fees
- Closing costs
3. Not Researching First Time Homebuyer Programs
Buying a house for the first time may make you eligible for special programs that can help you save time, money, and frustration. Some of them even offer down payment assistance to home buyers. You can ask your mortgage lender for available programs or you can research them yourself. You may qualify for USDA, FHA, VA loans, too, so don’t rule them out.
4. Skipping the Home Inspection
With the costs of buying a home adding up, you may be tempted to skip important but not required aspects of the home buying process, such as the home inspection. However, this is a big mistake that can cost you thousands of dollars in the long run. Home inspections can help spot major issues with the property before you close on the deal so that you can back out of the deal entirely, ask the home owner to make repairs, or adjust your offer price. Without a home inspection, you may be stuck with those costly repairs. The way to avoid this mistake is simple: ask for a home inspection.
5. Not Considering the Extra Costs of Homeownership
If you have never purchased a home before, you may think that you only need to save for the down payment and closing costs. However, you may need to make repairs or renovations that have high price tags, such as upgrading your HVAC system, repairing a roof, fixing a broken water heater, or updating your kitchen. You may also have homeowner association or condo fees. Also, don’t forget about the costs of insurance and property taxes.
6. Not Hiring a Real Estate Lawyer
A real estate lawyer can help you avoid these mistakes as well as safeguard your interests during the home buying process. Our Sanford real estate lawyer, Eddie Winstead, can draft or review purchase agreements, conduct a title review of the home, and advise you during the closing process. Contact Sanford Law Group today at (919) 776-4131 to learn more.