First-time home buyers - Be clear about these five mistakes!
Are you a novice here intending to buy your own house? Or have you come across those people who opted for the wrong choices while buying their first house? Exactly! First-time home buyers make a bundle of mistakes when it comes to buying their own house. And you shouldn't be the one.
Before you make a decision, you should look into the five big mistakes that could influence it. We all know that it is not about our poor decision, but the regret we will be having later on!
Here, we are going to highlight some five mistakes, first time home buyers should never indulge into:
Not able to coincide your purchase with your budget requirements
Buying a house is not like you dreamed about your own house and you woke up immediately to bring the key to your house. You daydream about this huge object and it takes your sweat to achieve it.
For purchasing a house, you must align your budget with your purchase. Novice house buyers usually think of a loan that is within the range of their monthly payment so that they can repay. And that is in their favor!
First-time homebuyers usually make the mistake that they could not estimate the cost they can afford. They end up wasting their time visiting houses which are either too expensive or too cheap. To avoid this confusion, newbies here should use a mortgage calculator to evaluate their affordable range.
Calculate and then visit your choice!
Stringently following only one mortgage lender
You go shopping, then enter straight into a single shop and buy your target product although it is of minimal quality? Is that the right way to purchase an item?
Let us tell you, before demanding a product, you must look into the variable forms of that single product. Similarly, do the same before lending a house loan. Always contact various mortgage lenders as interest rates vary from lender to lender and so their closing rates and discount rates. You know! One can save a great deal of amount if one does not stick onto one lender. Interacting with different mortgage lenders will help you save the interest on that loan.
How to aim at some best mortgage lenders?
- Create some best credit score
- Understand the types of mortgage lenders and their profiles (what service they offer)
- Compare the rates various mortgage lenders serve
- Make a list of questions beyond the common ones. Analyze their service deeply
- Try to have preapproval before further approval
Tip: Proofread your credit scores and make them free of errors.
Making down payments too small
It is always better to save money aside rather than entirely relying on the mortgage and your monthly payment. This would help you increase the down payments which means the mortgage will not get on your nerves every month you will have to pay it from your monthly income. Large down payments are proportional to less and affordable mortgages and more ease to manage them from monthly pay.
Now there is another curiosity associated with placing a large down payment strategy! This whole scenario belongs to the extra time required for saving money. Not only it would increase the time, but also an increase in house prices and risen mortgage.
Do you find any solution? Simply, manage your down payments such that you can manage to pay them every month. Not too extra and not too little!
- Using your credit card before the mortgage deal is finalized
Once you apply for a mortgage, it does not get approved within seconds and minutes. It takes a few weeks for final finalization. In between this period, do not simply buy on your credit. Do not use a new credit card for the purpose of buying items for your home until your deal is done.
A mortgage perhaps tallies your credit score report before final signatures. On finding a dwindled credit score, you may lose this chance to get a mortgage. Getting a new loan would do the same as it increases your debt-to-income ratio. Few weeks before and a few weeks later, the in-between duration could change your credit profile for your mortgage lender if you buy on your credit. Do not hasten!
- Wrongly estimated repairing, renovation, and homeownership costs
You are first time buying your own house and has not experienced how much your own house can cost you. When you live on rent, renovation and repairing costs are not your responsibility. Now, you may buckle under pressure due to added financial responsibilities on yourself.
The graph of monthly bills can be different from a renter's point of view because you are an owner now. Try to check the monthly bills of the seller from the past year or more so that you can estimate the amount of burden you may have in the future.
Also, the renovation and repair cost can cost you much if you don't consider it before. You should not rely on a seller entirely who gives you an estimation of renovation prices. You could be scammed! It is better to refer to people who have know-how about these price ranges.
Buying a house is a tough choice especially when you are a novice. First-time home buyers must scrutinize the deals. Also, they should align what they can purchase and what they can not. You can have mind-blowing offers for beautiful and attractive houses if you do not run to chase the keys.