First-time property buyers are prone to making mistakes. While errors made come with valuable lessons, some can be quite crucial and costly, and are best avoided. For first-timers, the smallest of errors can potentially mean losing thousands of dollars, buyer’s remorse, and other headaches.
Fortunately, a little preparation and knowhow can boost your chances of success, even if you’re a novice at real estate transactions. Get to know the six biggest first-time homebuyer mistakes to avoid.
NOT KNOWING HOW MUCH HOUSE YOU CAN AFFORD
NOT SHOPPING FOR A MORTGAGE
NOT PUTTING DOWN A BIG ENOUGH DOWN PAYMENT
FORGOING THE HOME INSPECTION
NOT RESEARCHING THE NEIGHBORHOOD
IGNORING FIRST-TIME HOMEBUYER PROGRAMS
If there’s one lesson that the housing crash of 2007 can teach today’s homebuyers, it’s to make sure you can afford the house you intend to buy. Your goal is to find a house within your means and secure a loan with a monthly payment that you can meet. To avoid buying a house you can’t afford, a mortgage calculatoris a good place to start. Make sure to factor in all the extra costs associated with homeownership – not just the mortgage.
Don’t just get one rate – get a quote from at least three from different lenders. It can take some legwork, but it will be worth it, considering that a typical borrower could save $300 per year on average by simply comparing rates, according to the Consumer Financial Protection Bureau (CFPB). That’s potentially thousands of dollars over the life of the loan.
Nowadays, even those with poor-to-no credit history can buy a home. But just because you can doesn’t mean you should. Hold off your planned purchase until you can make at least a 20% down payment up front. By doing so, you boost your chances of getting a better rate, paying lower monthly installments, and start building equity in the process.
Home inspection is an added expense (from $300 to $500 in Nevada), but it’s an expense you’ll want to factor into your budget. Even when every inch of the property seems to be intact, it can still contain unseen areas of concern. A professional home inspector will find problems that you may not, which can be helpful in ensuring you get your money’s worth on the house you intend to buy. Unless it’s a new construction home, you can’t avoid running into issues when it comes to existing homes for sale. An inspection report gives you a better picture of how sound the house is and gives you the option to continue negotiating or walk away from the deal.
You’ve probably seen a movie or two about families moving into their dream home only to have their lives turn into a nightmare because of bad neighbors. Be sure to visit the neighborhood a few times and get to know the community and its residents. Get a feel of the place and see if you can get along with your neighbors. Likewise, check out the amenities and facilities in the community – including restaurants, parks, pools, commute options, etc. – to make sure they suit your lifestyle.
There are plenty of programs available to help out first-time homebuyers. These include FHA, VA, and USDA housing loans, the Energy-efficient Mortgage (EEM) program, and the Good Neighbor Next Door program, to name a few.
The state of Nevada also has its own statewide homebuyer programs, such as the Nevada Housing Division Homebuyer Program and the Mortgage Credit Certificate (MCC) program. Get in touch with a local housing authority and see if you qualify for any federal or state programs so you can take advantage of them.
I, Tammy Eden, have helped a lot of Summerlin first-time buyers sail smoothly through the home buying process. I am excited as you are about the prospect of owning your first-ever home in Summerlin, NV. Let me show you how to buy a home for the first time step by step. Call me at 702.513.1300 or send an email here.