When you are looking to purchase your first home, it can be quite overwhelming. There is a lot to do, finances to sort out, papers to sign, and more. Therefore, it’s common for mistakes to be made. Unfortunately, if the deal is already close there might not be much you can do about it. However, if you’re searching for a new home (whether it’s your first or not), check out these common mistakes that first-time buyers make below. By knowing what they are, you can avoid making them yourself.
Common Mistakes First-Time Buyers Make
Jot down this list, bookmark this page, or print it for later. This is the essential list of common mistakes first-time buyers make. We have put them in order of the home buying process to the best of our ability. Keep these items handy when you’re buying your first or next house.
1. Not Pulling a Credit Report
The first step in your home buying process should be pulling your credit report and checking it for mistakes. If everything is correct, take a look at your credit score to make sure you have worked on it enough to qualify for a mortgage.
2. Looking for a Home Before Taking Care of Finances
Getting preapproved for a mortgage should come first before you start looking for your dream home. This can not only help you avoid disappointment, it can also show sellers you are a serious buyer.
3. Only Getting a Quote from One Lender
One of the most common mistakes first-time homebuyers make is not getting a quote from more than one lender. The process to get a quote can sometimes be time-consuming. This can lead to you taking the first quote you get so you can just get it over with. However, this can literally cost you thousands of dollars. Check different lenders and get quotes from them to find the best deal.
4. Not Considering Federal Loans and Grants
Many states, some cities, and even the federal government provide first-time buyer loan and grant programs. Most people think they won’t qualify for this or they don’t even know about it at all. Even if you don’t qualify, you can also apply for one of three different government insured loan programs. These include Federal Housing Administration (FHA loans), U.S. Department of Veterans Affairs (VA loans), and U.S Department of Agriculture (USDA loans).
5. Making Too Small or Too Large of a Down Payment
One of the most regrettable and common mistakes first-time homebuyers make is making too large or too small of a down payment. You may be asking yourself how you can make too much of a down payment. Basically, if you’re draining all of your savings to make the payment, it’s not a financially sound idea. At the same time, when first-time homebuyers were surveyed about the experience, most admit they regret not waiting longer so they could have had a larger down payment. The standard 20% down payment is now considered to be too high. The median is now reported to be 6% for first-time buyers. However, there are some programs that offer zero down or as low as 3.5%.
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