Don’t Make These 4 First-Time Home Buyer Mistakes
There is a lot to know and watch out for when you are a first-time home buyer. The amount of decisions can quickly become overwhelming.
But, buying a house is a big financial commitment and a decision you need to be careful when making. Your big financial decision could become a big regret if you don’t avoid doing these 4 things.
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Not Doing Your Homework
Because there is so much to learn as a first-time home buyer, it is mandatory for you to do your homework. As with most situations, the more you know, the better off you will be. For this reason, the successful first-time home buyer is the one who takes the time to research the local market, to understand the past trends alongside future projections, and to run the numbers on the local comps.
By taking the time to dig into the neighborhoods you are interested in – learning as much as you can about everything from the school systems to the property taxes – you put yourself in a position to find the right home for you.
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Thinking you can worry about the money later
When you are buying a house you need money. That seems obvious but many first-time home buyers are surprised at exactly how much they need.
The amount of your down payment depends on your financial situation and credit worthiness. While most buyers think about the down payment they forget that there are other closing costs that they are responsible for. Talk to your mortgage lender from the start to find out an average of how much you will need depending on how much you are planning on spending on the house
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Forgetting about insurance
There are several different kinds of insurance a first-time home buyer is going to have to worry about. If you don’t plan carefully, the insurance can actually make it so you can’t afford to be approved for the mortgage and wouldn’t be able to keep up with your financial responsibility.
You will at the very least need homeowner’s insurance. If you don’t have at least 20 percent equity in the house, you will most likely need private mortgage insurance (PMI) as well. And depending on where you live you could need additional insurance such as flood insurance.
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Becoming emotionally attached
If you allow yourself to become overly attached to a house that you make an offer on you can end up making a decision that you will later regret. There is no house that is worth going over your budget and giving up your peace of mind for.
There will always be another house that will come along. Do not let your emotions control your decision in your home buying experience.
As a first-time home buyer, you need to carefully think through each decision as you work through the process. Avoid these mistakes so you will make a decision that you are happy with. Don’t be afraid to ask questions along the way to make sure that you have the knowledge that you need to succeed.