5 Typical Mistakes Made by First-time Homebuyers

When it comes to making one of the biggest decisions and most likely largest single investment opportunity in your life, you want to make sure that you do things the right way. Unfortunately, there are things that people have done when it came to buying that first house that they should not have done. 

There are a lot of factors that go into making a sound buying decision when it comes to that very first home. You really want to be sure that you have planned ahead before you jump right into the home buying experience.

5 Typical Mistakes Made by First-time Homebuyers

Fail to realize that there is more to it than affording a house payment - One of the biggest mistake first-time home buyers seem to make is that they focus too heavily on the mortgage payment. They fail to take all of the other things into consideration and end up in a situation known as house poor. That is when you buy a house and end up with a mortgage that all you do is afford to make the payment.

You need to take your time and go through everything associated with home ownership and be sure that the mortgage payment will fit in with all of your bills. Then, only make the final decision when you are comfortable in the cost of the home versus your finances. It is always a good idea to take a little extra time when it comes to such a big investment.

Looking for a house before worrying about the mortgage - If you ask any realtor if you should have a good idea of the mortgage situation before you begin your home search. The overwhelming majority of them will tell you that you should already have talked to some mortgage lenders. This is mainly because you do not want to find out after you find some good homes to choose from and then you discover that you cannot afford the mortgage payment for your new home.

The mortgage lender will be able to help go over with you with what amount of a mortgage that you will be able to handle, based on your personal finances. This will go long way in helping you avoid the surprises that can happen when it comes to first-time home buying.

Not seeking the help of a real estate agent - It is hard to believe that anyone would not take advantage of the knowledge and expertise of a local real estate agent when they start looking for their first home. An agent will be able to help you navigate through all of the home listings in order to find homes that are going to be a good fit for you. Without the help of an agent, you will more than likely miss some potentially good homes.

Putting all of their savings into the down payment - The down payment on the purchase of a home is the way that the buyer avoids having to pay any mortgage insurance in order to secure the loan. The mistake a first-time home buyer often makes is that they drain their entire savings in order to come up with the down payment that is required for the mortgage on the house they are looking to purchase.

This is definitely not a really good idea, you should always leave enough money in your savings for a good emergency fund. This will help to prevent you from becoming house poor after a short time, especially if some unexpected large expense happens.

Taking out additional loans before the mortgage closing - One thing you have to realize when it comes to a mortgage, nothing is definite until you sign the papers on closing day. This is because on the final before closing they take one last look at your credit report to ensure that nothing has changed that could jeopardize your ability to repay the loan. 

If they see that you took out additional lines of credit that could change the numbers that they used to calculate your mortgage. It could end up being a deal breaker and you might end up losing your approval. So, if you are looking at adding additional credit accounts, you would be wise to wait until after closing.