Are you in the position to purchase your first home? Congratulations! Buying your first home is a significant rite of passage. However, as most major events we face in our lives, you may feel a little overwhelmed. Don’t worry, this is natural.
With some proper planning and advice from home buying professionals - you’ll be ready before you know it. Our team put together a list of the most common mistakes first time home buyers make and how you can avoid them and move forward to ensure a pleasant and memorable experience. Here they are:
1. Not Having a Budget
It is necessary to set a price range before starting to shop for a house. Falling in love with a particular home before establishing a budget can lead to sticker shock or disappointment.
2. Not Checking Credit Rating
Buyers who plan to get a loan for a mortgage should be aware of their credit scores. Paying off debt, making timely payments and avoiding opening new credit lines increase the likelihood of receiving a bank loan.
3. Not Establishing Priorities
Before investing the time in touring houses, buyers should list the features of their ideal home. Rating the importance of each and having a firm set of criteria in place will save time and energy by immediately disqualifying unsuitable options.
4. Not Finding a Reputable Realtor
Working with an experienced real estate agent is critical for first-time home buyers. A knowledgeable agent can identify and steer eager buyers away from pitfalls they may not consider. A trustworthy agent can offer valuable insights about neighborhoods, analyze offers and negotiate a purchase price with the sellers or seller's agent.
5. Not Considering a Down Payment
Many first time buyers have the impression they are obligated to provide a 20% down payment to qualify for a mortgage loan; however, it is possible to reduce or eliminate this amount. For example, the U.S. Department of Veterans Affairs and the U.S. Department of Agriculture provide qualifying applicants with loans requiring no down payment. The Federal Housing Administration accepts down payments as low as 3.5% on loans. The North Carolina Housing Finance Agency offers a 1st Home Advantage Down Payment grant of $8,000 to many first-time buyers.
6. Not Prequalifying for a Mortgage
By meeting with several mortgage lenders to predetermine their monthly payments, first-time home buyers can set realistic expectations for what they can afford and avoid hasty financing decisions when they are ready to make an offer.
7. Depleting Resources
When a down payment eats into a buyer's entire savings, it is wise to select a more affordable home. Down payments of 20% can avoid mortgage insurance payments but put buyers at risk of financial difficulties if they deplete their financial reserves.
8. Letting Emotions Guide the Purchase
First-time buyers are susceptible to emotional house-purchasing. To avoid biting off more than they can chew, buyers should focus on practicality.
Rely on an Expert
Working with the knowledgeable realtors at Chapel Hill Realty Group can help you avoid common mistakes and make buying your first home a memorable and a wise investment.
Call our team at (919) 942-4149, or contact us online to set up an appointment today!