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6 Mistakes First Time Homebuyers Make

Every person has a unique reason to buy a home, whatever your reason is, buying a home for the first time is a commitment that can help you get closer to your financial stability or can lead you to buyer’s remorse. It all depends on the choices you make along the road. The following mistakes will help you become more aware and break the cycle of errors most first time homebuyers make.

House hunting before getting pre-approved

Making the mistake of house hunting and falling in love with a property before getting pre-approved can lead to disappointment. Make sure that before you start being serious about a property you sit down with a lender and find out how much you are able to borrow. The preapproval process requires a lender to review your income and expenses. Depending on the case, a buyer may need to spend up to a year saving more money, increasing their incomes or cleaning up their credit before making an offer on a home.

Not searching for first-time homebuyer programs

As a first-time homebuyer you may not be aware of the programs available to you. There are many different programs and grants that can help you afford your first home depending on the state you live in. Generally these programs help you with down payment and closing costs, many without needing to come up with a 20 percent down payment*.

Buying a house you can’t afford

As a buyer you should know your limits, avoid stretching your budget and overpaying for a home you can’t afford. Work on a monthly mortgage budget and don’t make decisions based on emotions. Taking into consideration your debt-to-income ratio and how much money you spend on the daily basis including transportation, food, medical, insurance, food, savings and other necessities.

Lack of understanding credit score

A minimum credit score needed to buy a house depends on the mortgage program and lender. According to Fannie Mae a conventional loan usually requires a credit score of at least 620 FICO*. The most common mistakes people make while in the process of closing a home is opening new credit card accounts, making large purchases, getting a car out of the dealership, closing existing credit card accounts or utilizing more than 30 percent of the available credit limit. Remember, a lender’s mortgage decision is based on your credit score and your debt-to-income ratio, which is the percentage of your income that goes toward monthly debt payments.

Forgetting or miscalculating the costs of homeownership

The reality is that besides your monthly mortgage payment now you will have to look into immediate costs such as moving costs, new furniture, appliances, utilities, HOA, homeowners insurance, property taxes, landscaping and ongoing maintenance. Also keep in mind long term maintenance, repair, renovations and upgrades. Don’t fall into the trap of buying more home than what you can afford.

Skipping the home inspection

There are significant risks involved when skipping your home inspection and although people are choosing to skip a home inspection due to the low market inventory and high demand, there are many reasons why you shouldn’t. A home inspection reveals critical information about the condition of the home, the health issues, costs, repairs and maintenance that will require immediate and overtime attention. It provides information regarding carbon monoxide, mold, radon, illegal additions or alterations that might affect your insurance or taxes. It gives you the opportunity to negotiate with the seller and the last chance to back out of the offer if the issues are a deal breaker for you.

Mistakes can be avoided when having the right information, tools and team of people that will look out for your best interest. In TrySwitch we pride ourselves in going above and beyond connecting all of the puzzle pieces for a successful transaction. Our TrySwitch platform gives you the freedom to select all the properties you love within the app, you can share it with the people involved in your search, add comments, notes, search by area or property type, providing you with the most necessary resources, connecting you with local realtors, plumbers, builders and more.

*First-Time Homebuyer Loans And Programs
*B3-5.1-01, General Requirements for Credit Scores (08/05/2020)
*Annual free credit report Annual Credit Report.com – Home Page