Buying your first home is a major milestone and a life-changing event. It’s also unfamiliar territory, with new terminology, contractual obligations, and important decisions that have to be mastered, met and made in a short period of time. Get ahead of the game so that you can avoid these six rookie mistakes.
Not Even Starting. You want to buy a house but you’ve heard that there’s no way you can qualify for a loan. Your credit score isn’t high enough. You don’t have enough saved for a down payment. You’re self-employed. Unless you heard this from a mortgage loan originator who analyzed your income, assets and credit, don’t believe it. Just because a friend or family member said that you need a certain credit score or a certain percentage of a home’s sale price as a cash down payment doesn’t make it so. Get the facts by meeting with a mortgage loan originator. (Of course, I’d recommend you choose RJ Crosby from First Choice Loan Services Inc.)
Looking For Houses Before Discussing Financing. The exciting part of buying a home is finding the house (or condo or townhouse). The home loan? Not so much. But here’s the deal. Unless you know how much you can afford, you are setting yourself up for disappointment when you fall in love with a home you can’t buy. In addition, a good Realtor® will insist that you have your financing organized before you look so you can focus on the right properties. Start by meeting with The Crosby Team.
Working Without A Realtor®. The internet is a wonderful thing. You can look at thousands of properties. You can take detailed virtual tours. You can research cities and neighborhoods down to the micro level. Why bother to have a Realtor® represent you? First, a knowledgeable real estate professional will help you narrow your search to properties that you like and can afford. Second, the purchasing process is complicated, so you need someone who understands contractual language and deadlines. Third, you will need other professionals, like a home inspector. Realtors® have contacts and can make recommendations. Finally, real estate transactions are human interactions. Negotiations may become heated. There may be after-sale issues. You need someone experienced, levelheaded, and tenacious to fight in your corner.
Ignoring Your Loan Originator’s Advice. When your loan originator tells you how much you can borrow, and what loan program(s) will work for you, you’ll also hear what you need to do to maintain your ability to take out the loan. Listen carefully and follow the instructions to the letter. If you change jobs or even the way you are compensated at your job (salary to commission, for example), or you open a new credit account, or you deposit a large sum of money into your bank account, you may wreck your deal. Always check with your loan originator first.
Letting Your Heart Rule Your Head. When you fall in love with a home, you may ignore warning signals that would normally make you pause. You may gloss over things that, if you saw them at a friend’s house, would make you wonder why they put up with them. Think of your home as a long-term relationship and consider carefully before you commit.
Not Budgeting For Expenses. When you’re a renter and the pipes burst, the furnace dies, or the roof leaks, you call the manager or property owner. When you own a home, that’s you! Remember also that if you take out a fixed rate loan, insurance and property taxes will probably (almost certainly) increase over the years, so while your principal and interest payment will be stable, you’ll need more money for those items. Make sure you understand the ongoing costs of homeownership, and be prepared to set money aside for both expected – and unexpected – expenses.
Ready? What’s your first step? Call The Crosby Team with First Choice Loan Services Inc. today!
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