How to Avoid These Six First-Time Home Buying Mistakes

Buying a first home can be an exciting and sometimes scary experience. There’s a lot involved with a home purchase; from getting pre-approved, finding the house, inspection and more. While Minteer Real Estate Team’s Buyer Specialists will make the process as smooth and as fun as possible, here are six common first-time homebuyer mistakes and ways you can avoid them.

1.     Borrowing the maximum amount allowed by the mortgage lender and not setting a realistic budget

Based on your finances, a mortgage lender will approve your mortgage loan up to certain amount. Just because you are approved to purchase a $240,000 house, doesn’t mean you should. Costs such as taxes, insurance, homeowners fees, home maintenance and utilities are not factored into the approval. Looking at these costs are important so you can see if that new house at $235,000 will be realistic with your current finances. Minteer Real Estate Team’s Buyer Specialists can even ask the Seller’s agent to provide the average monthly utility costs so you can get a more accurate financial picture.

2.     Thinking about the future

You may not be thinking about selling that home you just fell in love with, but with the average homeowner staying in their home for just four years (according to Inman News), you have to look at the home’s resale value. It’s important to look at the big picture and what it will look like in four years to resell that home. While Zillow Zestimates are easy to access, it’s important to talk to a real estate agent who can provide you with a more accurate value based on recent home sales and how long homes in that area stay on the market.

3.     The Preapproval

The first step to purchasing a home is getting preapproved through a mortgage lender. It’s important to get preapproved before even looking at homes. Doing the preapproval is vital as it provides you with the home range for you start looking, and if there is something negative on your credit report, you have enough time to fix it before you are even under contract. If you don’t know where to start in finding a lender, Minteer Real Estate Team has a list of lenders who we’ve worked with and trust.

4. Indecision

In the current Seller’s market, not moving quickly enough on a house by taking too much time to decide can often mean losing out on the home. A multiple-offer situation is great for the Seller, but not great when you’re the Buyer. Hesitations are normal when finding a new home, but don’t let those hesitations cause you from purchasing your dream home. Minteer Real Estate Team’s Buyer Specialists can help you work through any of your hesitations.

5. Only looking online for mortgage rates and available homebuyer programs

As great as the convenience of the Internet is, it’s best to call a local mortgage lender and sit down in person to discuss mortgage rates and programs available for first-time homebuyers. Choosing a non-local lender can mean they don’t know the correct paperwork for Texas. Closing dates can often be pushed back and the appraisal can be off as they don’t know the local housing market. An accurate appraisal is crucial in the homebuying process. If the appraisal is lower than what you offered, you, the Buyer, often have to find the funds to cover the difference or you may have to walk away. There are also many new programs available to first-time homebuyers. A local lender will be able to help you walk through any available programs.

6. Debt-to-income ratio

The debt-to-income ratio is your recurring monthly debt divided by monthly gross income. This number affects how much you can borrow for your mortgage. Taking out a car loan or another high-dollar item after being pre-approved will affect this number and ultimately your mortgage. Lenders often don’t want to see a number higher than 43. However this number is dependent on the lender and the type of loan you take out.

If you have any questions about the home buying process, our Buyer Specialists are here to help! Contact us today!

(Info gathered from Inman News)