For a first-timer, home buying can be pretty overwhelming. There’s so much paperwork to fill out, all those real estate terms to try and decipher, and then there’s the massive decision you have to make: where you’re going to live for the next few years, maybe even decades, of your life.
But home buying doesn’t have to be daunting – even for the inexperienced. Want to make your buying process as easy and hassle-free as possible? Then avoid these common mistakes:
1. Not gathering your mortgage paperwork early.
Often, the most time-consuming part of the home buying process is the mortgage application. From bank statements and pay stubs to tax returns and employer verification forms, lenders need all kinds of paperwork to process your loan. But you don’t have to wait until you’ve found a mortgage company to start gathering this all up. If home buying is anywhere on your radar, start pulling together your documentation ASAP. Add it all to a specific folder on your computer or print it out and put it in your filing cabinet. Either way, you’ll save yourself tons of time once the application process actually kicks off.
2. Failing to get pre-qualified.
Pre-qualification is hugely important – especially in today’s market. Not only can it give you some guidelines as to what price range to look in, but it can also put you a notch above your competition. The housing market is a hot one nowadays, and you could find yourself in a bidding war pretty easily. If you’re pre-qualified when you put in that bid, you’ll look more appealing to a seller – particularly if other buyers haven’t been pre-approved by a lender.
3. Buying too much home.
Just because your lender pre-qualifies you for a $500,000 loan doesn’t mean you should max that out and spend it all.Owning a home comes with many costs in addition to your monthly payment. There’s maintenance and repairs, utilities, lawn care, cleaning costs, insurance and all kinds of other expenses that you need to factor in. You will also need a down payment and may need to cover PMI for a few years as well. Consider all these costs when deciding what price range to buy in.
4. Not shopping around.
Not all mortgage lenders are created equal – especially when it comes to rates. If you really want to make sure you get the best deal, spend some time shopping around. Research their customer reviews and see what rates each one offers you. The lower your rate, the less interest you’ll pay over the life of the loan.
Buying a Home Doesn’t Have to Be Scary
If you’re a first-time home buyer, don’t let the process overwhelm or scare you. Work with a reputable agent and lender, and take your time understanding the buying and mortgage processes. Start early, ask questions and do your research before diving in. This is one of the biggest decisions of your life! Want expert help to guide the way? Contact The Claus Team today. First-time buyers are our specialty.
*Cover photo image credited (c) from weetas.com