Buying your first home is both exciting and overwhelming! The anticipation of finally owning your own home and the fear of how to make that happen combine for a very exciting time in your life. But as a first time homebuyer, there are a few things you’ll want to avoid so that your experience runs smoothly and efficiently!
When you’re finally ready to buy that first home, your excitement might lead you to looking for homes as soon as you realize home ownership is for you. But despite how excited you are, you should always shop for a loan first! Although you might think that finding the house comes before the loan, you are simply setting yourself up for disappointment if your loan comes out lower than anticipated. By getting prequalified for a loan, you’ll know exactly what your price range is when looking for a home. This way you won’t be tempted to look something that’s totally out of your price range. Contact a broker or mortgage professional to get preapproved and then have fun searching for your dream home!
Despite what you think, you need a Realtor right from the start! Some first-time home buyers tend to do things on their own, but it’s best if you use a professional right from the start. This way you’re guided by someone who knows the industry, business, location, etc. and will have better insight on homes in your price range. They’ll be able to answer all of your questions and help you with all the confusing parts of home buying. Remember, buying your first home is a huge investment and not letting a professional help can lead to huge problems later on.
Even though you might be tempted to use up all your savings so that you can reach that 20% down to dodge having to pay mortgage insurance, emptying your savings is never a good idea. In finance, one rule is to always have at least three month’s expenses saved in case anything happens. And when you’re buying a new home, anything can happen before, after or during closing! If you’re moving to a bigger place, you’ll need to buy furniture to fill it or might have to do some repairs before you move in. Don’t put yourself in a weak financial position, make sure you have some money set aside for a rainy day.