Many people view purchasing property as a long-term goal, some see it as a rite of passage. Either way, buying a home for the first time can be an incredibly stressful experience. Those who are going through this process for the first time might be worried about making mistakes that may leave them with the wrong house or a high-interest rate. There are a few common mistakes that first-time homebuyers make that everyone should know.
Not Applying for a Mortgage First
You may want to get out there and find the home of your dreams right away but it is important to apply for a mortgage first. First, it shows any potential seller that the person they are working with is serious about buying a home. This is key because it will convince the seller to negotiate in good faith. Furthermore, when you apply for a mortgage, the lender will provide a maximum loan amount. This gives the borrower a budget with which to work.
Talking to Only One Lender
Be sure to speak with more than one mortgage lender. One lender might offer a certain interest rate to the borrower, another lender might be willing to offer a lower interest rate on the same loan. Other lenders might be willing to wave origination fees or points. Having multiple offers increases your leverage during the negotiation process.
Buying a Home that is Too Big
Be sure to focus on more than just the price tag. While this is a key expense, it is not the only one. Potential homeowners should also consider home insurance, real estate taxes and home maintenance costs. These additional costs may result in the purchase of a home that is too large for their budget. Be sure to take every cost into account when looking for a home to avoid financial stress.
If you are looking to buy a home, consult with a real estate professional to help you secure the right deal on the home of your dreams.