It’s an exciting time to buy a home. Those interested in making their dream of homeownership a reality may find opportunities within their community to do so if they stay patient and continue to look around. Embracing the process may seem a bit overwhelming for those buying their very first home. There’s much to think about – obtaining a mortgage, locating a home that meets every expectation, and balancing day-to-day life isn’t always simplistic.
One of the best ways to buy a first home with confidence is to have a strong education in the process. That means avoiding some of the most common mistakes first time home buyers make. Here are some examples.
#1: Not Securing a Loan First
It’s tempting to look up available homes for sale within the community and even go for a few showings. Yet, it may not be worth the time invested unless the buyer knows how much he or she can afford to spend. There are two reasons for this:
- There is no benefit in locating a home that’s out of the price range of affordability. It can be heartbreaking to find the ideal home and then learn it’s out of the price range.
- Sellers want well-qualified buyers. These are individuals with a home loan ready to go. Placing an offer on a home without a mortgage may be difficult and limiting for many.
The better option is to work with a home lender as a first step.
#2: Choosing a Home That Doesn’t Check All of the Boxes
It can be easy to fall in love with a home based on the way it looks or the features it offers. Look beyond this. Ask questions such as:
- What is the neighborhood like? Take the time to go for a walk to really find out.
- What is the commute to work going to be like? To find out, drive it at the same time of the day you would normally do so.
- Is the home too large to maintain? Is the home too small and may not be large enough for you in a few years when you decide to start having a family?
- What are the neighbors like in that area? Could there be concerns about loud noises or bothersome neighbors?
- How much work does the home really need before moving into it? Consider both aesthetic and repair-based needs.
Learn as much as you can about the home. Your real estate agent can help you by providing access to the previous sales reports for the home.
#3: Not Choosing the Right Loan
The good news is there are numerous types of home loans available. The hard part is knowing which one is right for you. If you’re working with a trusted lender, you’ll have ample insight into the options. Here are a few things to consider.
- FHA loans may be the ideal choice for many people buying their first home. These loans tend to offer lower interest rates, lower down payment requirements, and easier qualifications overall.
- If you’ve served in the U.S. Armed Forces, you may qualify for a VA loan. That’s another outstanding way to reduce costs.
- USDA loans are yet another loan that may help you reduce the costs of borrowing. If you’re buying in a rural area (you may be surprised what’s considered a rural area), you may not have to make a down payment on this loan.
Invest some time in working with a lender like Firefighters Credit Union, as well as a great real estate agent to make the best decision for your first time home purchase!