If you are purchasing a home for the first time, the homebuying process can seem confusing and intimidating. However, by doing a little research, knowing the best approaches to the process and what mistakes many first-time homebuyers make the most can help you feel a little more confident.
So, follow these do’s and avoid these don’ts as you begin your journey toward homeownership:
Don’t rely solely on online loan information
With the Internet becoming king of all we do, it’s easy to rely so heavily on the information present online. However, it is critical that you do not use this as your only source of information. CNBC reported that putting too much faith in online content is one of the biggest mistakes many first-time homebuyers make. Misunderstandings of the terms and conditions of the loan can be detrimental to the transaction.
You should speak with a professional loan officer to get more information about available products. Also, ask any questions you may have to clarify your understanding.
“While you might have your mind set on a specific region, do branch out.”
Realtor Magazine noted that if you are unprepared for the loan application and homebuying process, it can cost quite a bit of time and money.
“It’s going to take a lot of time to prepare,” said Cara Pierce, a housing counselor at ClearPoint Credit Counseling Solutions, according to Realtor Magazine. “That way, when the deal comes along, you’re ready to pounce on it.”
In addition, you should reach out to a professional real estate agent who understands the market and current values of homes in the area. Their experience will help you gain a better understanding of when to invest in property and how much you can actually afford with the current housing market conditions.
Do drive around and experience different neighborhoods
While you might have your mind set on a specific region, do branch out. Check out a couple new neighborhoods because the one you thought you wanted might be too expensive or there might be an even better place out there and you didn’t even realize it.
Walk through the residential parts and check out any shops, restaurants or bars in the region. You can gain a lot of insight just by exploring a little bit. You may even want to reach out to a few of the locals and ask some questions about the community. If people are passionate about where they live, it is usually a good sign.
Don’t skip a home inspection
Even if a home was newly built and you will be the first person to move in, never skip a home inspection. Having a professional look at the property and evaluate its condition is critical when determining whether to purchase a home.
“It takes a trained eye to be able to see the problems that can exist in a home,” said Bill Loden, president of the American Society of Home Inspectors, according to CNBC. “The inspection can also give the first-time buyer a bit of a schooling on the house and how to maintain it.”
In addition, the results of a home inspection are useful when negotiating a final selling price. If the house needs a new roof or the HVAC system is on its last leg, you can bring this up and request a replacement or a lower final selling price.
Do find a professional real estate agent
Realtor Magazine Online reported finding an expert when searching for a home can help you navigate through this substantial purchase – especially if this is the first time you are investing in real estate.
“Before starting your search for a new home, apply for pre-qualification.”
You will want to find someone who has experience helping interested buyers and understands the areas you are considering buying a house. Also, ask friends and family members who have recently purchased a home if they have recommendations. These individuals can offer valuable insight and guide your search for a professional real estate agent as you search for the perfect home.
Don’t forget about your credit score
When you apply for a home mortgage, your credit score has a substantial impact on whether you are approved for a loan and what kind of interest rate you will be locked into. Realtor.com noted you should check your credit report for any inaccurate items prior to applying for a loan. You are entitled to one free credit report every year from the three credit bureaus: TransUnion, Experian and Equifax. If something doesn’t reflect your spending habits correctly, you may want to enlist the help of a credit repair service.
If you want to bring your score up, make sure you eliminate as much debt as possible. Pay bills on time and in full whenever possible to help maximize your chances of landing a low interest rate. It will translate into a great deal of savings over the life of the loan.
Do get pre-qualified for a home loan
Before starting your search for a new home, apply for pre-qualification. When you make an offer on a home, the seller will likely look at it more favorably if you’ve already been qualified for a mortgage. It isn’t necessarily a guarantee, but it shows that you are a serious contender for any homes you want to make an offer on.
Don’t purchase anything big before closing
When you are involved in the homebuying process, it isn’t the best time for major expenses. Put off any huge investments or purchases until after you have closed on a house. New cars, big vacations and other frivolous expenses should not be completed at this time. Typically, loan officers will re-check your current debt right before closing takes place, so ensuring there aren’t any surprises is critical.
Buying a new house is exciting, but you’ll want to prepare for the investment and know what you are getting yourself into. Understanding the do’s and don’ts of purchasing a new home is your first step toward becoming a responsible homeowner.