Becoming a first-time home buyer is an exciting development. For many, this purchase represents a lifetime of aspirations, savings, and hard work. Avoiding these five common mistakes of first-time home buyers will help you to sidestep unnecessary stresses as you navigate this lifechanging transaction.
At the end of the day, you are making a large commitment that will impact your life for a good few years. It is important to understand these common pitfalls to ensure that this decision is one that you will be satisfied with.
Buying More House Than You Can Afford
Becoming a home owner is more than just about obtaining the initial mortgage. If your monthly payments will stretch your budget to the breaking point, this can cause both psychological angst and prevent you from being able to comfortably afford other items you might need.
Owning a house is a big commitment, financial and otherwise. You will be responsible for managing your property, dealing with regular upkeep and maintenance. Roofs leak, windows break, and pipes burst. Will you have enough savings–and the required energy–to fix these items?
Moreover, the larger the house, the greater the utility bills as well, with heating and cooling costs taking a chunk out of your wallet. Property taxes will add an additional expense to your monthly budget, and
Moreover, the larger the house, the greater the utility bills as well, with heating and cooling costs taking a chunk out of your wallet. Property taxes will add an additional expense to your monthly budget. Since they are directly related to the value of your house, the more expensive the property the larger your subsequent obligation.
Experimenting with the TipRanks’ mortgage calculator can help you to get a sense of the contours of your potential mortgage, your monthly payments (including insurance, estimated property taxes, and homeowner association fees), and the overall cost of this loan. Make sure it is one that you can afford.
Ignoring the Neighborhood and Surroundings
The home you purchase is likely going to be your center of gravity for a good few years, at a minimum. Make sure that you and your family will feel comfortable building a life in your new community.
While it is easy to get carried away with the particular property, no individual or family is an island. The surrounding environs will also be a part of your daily existence, so it is important to do some research to understand if the area meshes with your preferences. This includes your general feel and comfort level of living in the neighborhood, but could also encompass researching the schools, parks, and public transportation options.
A primary residence is never just an investment property, or a springboard to another home in the future. Even if down the road you sell your home and upgrade to a better property, you are still going to be living in your current house for the near future. Make sure that it is one that you are comfortable calling a home.
Letting the Perfect Become the Enemy of the Good
Buying a home is a monumental purchase, one that requires an enormous outlay of sacrifice and effort. It is natural that you will not want to settle for anything, but waiting for the perfect combination of size, zip code, age, and any other consideration under the sun, may mean never making an offer.
Think about the most critical aspects of your future home. By defining the absolute musts for your residence, you are also taking the time to reflect upon where you might be willing to compromise. This will help you to narrow down your search, while simultaneously giving you the freedom to pursue those properties which satisfy the most important criteria for you and your family.
Continuing your search until all of your stars align can be more than frustrating. It could also translate into never owning a home.
Not Taking Advantage of Government Financing
There are a number of federal government programs that are designed to help would-be homeowners from a number of different walks of life.
The Federal Housing Authority (FHA), for instance, provides mortgage guarantees for those looking to purchase their primary residence. The FHA will ensure up to 96.5% of your mortgage, meaning that if you work with a qualified lender you may only need to provide a down payment of 3.5%.
The Veterans Administration (VA) also provide loan guarantees to private lenders. The VA program allows veterans, active duty service members, and eligible spouses to purchase a house with zero money down.
The U.S. Department of Agriculture (USDA) has a number of programs designed to help would-be rural home buyers build a life in less populated areas. The USDA offers both direct loans and loan guarantees.
Many states offer homebuyer assistance programs as well, so make sure that you investigate all of these options at your disposal.
Doing Everything on Your Own
There are plenty of professionals who devote their working lives to helping individuals buy and sell homes. These experts have built up a lifetime of experience working on problems and issues that can pose major hurdles for both first-time and experienced buyers.
Working with a trusted advisor can help you to overcome the financial, regulatory, and logistical hurdles inherent in an economic transaction of this size. The details are important, and it is likely that you will not be able to consider all of the various issues involved if you elect to do it yourself.
If you are not sure who to turn to for assistance, conduct some research online to see who has good reviews, ask for recommendations from your social circles, or even consider visiting an open house or two to have in-person conversations with real estate agents.
Their job is to help you navigate this process. Do not be afraid to work with them to do so.
Conclusion: There is No Place Like Your Home
Your home is more than a physical structure, much more than simply four walls and a roof. Rather, it is a place of refuge, comfort, and relaxation.
There are many questions surrounding your home purchase, some of which can cause stress and anxiety. Finding the best fit for you depends upon a number of different considerations that you should make sure to take into account.
As you pursue your dreams of home ownership, make sure to avoid making these common mistakes. It will make your journey less bumpy, and ultimately increase your chances of success.
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