Buying your first home is exciting. However, it comes with many big decisions. As exciting as it can be, it can be quite scary too. You can easily get swept up in the whirlwind of home shopping. Resulting in mistakes that could leave you with buyer’s remorse later on. Luckily, you can avoid these mistakes if you know what issues to avoid. Below are 5 first time home buyer mistakes to avoid to prevent you from looking back and saying “If I only knew then.”
1. Looking for a home before getting preapproved
The very first mistake you can make as a first time home buyer is looking for a home before applying for a mortgage. This is because you can lose a property you’re interested in if you aren’t preapproved for a mortgage. Getting preapproved for a mortgage ensures that you have the financial stability to purchase a home, helps you understand how much you’re able to afford, and sends the message to the seller and real estate agent then you’re a serious buyer.
2. Talking to only one lender
The second mistake you can make as a first time home buyer is talking to only one lender. This is because you’re potentially leaving thousands of dollars on the table. Therefore, the more you shop around, you’ll be able to have a comparison to ensure you’re getting a good deal and the lowest rate as possible. You should talk to at least 3 different lenders and a mortgage broker to help you get rates, lender fees, and loan terms.
3. Buying the most house you can afford
The third mistake you can make as a first time home buyer is buying the most house you can afford. This is because you might assume that you can purchase a house for that amount after seeing what you’re approved for. If you purchase a home that exceeds your budget, you’re putting yourself at a high risk of losing your home, if you fall on tough financial times.
4. Draining your savings
The fourth mistake you can make as a first time home buyer is draining your savings. This is because spending all of your savings on the down payment and closing costs may leave you living on the edge. What if you fall on tough financial times? You won’t have emergency funds to help you pay living expenses for at least a couple of months/
5. Making decisions based on emotions
The fifth mistake you can make as a first time home buyer is making decisions based on emotions. This is because it’s easy to get too attached and make emotional decisions, which leads you to overpay for a home and going over your budget. Just keep in mind that you’re making one of the biggest investments of your life. So, take your budget into consideration and don’t become emotionally attached to a home that you don’t own.