Buying your first home comes with a lot of emotions – and a lot of foreign steps. Sometimes, it can be difficult to know where to start – and it can be really difficult to know who’s advice to take, when you’re getting insight from everyone you know who’s ever purchased a piece of property – and even some who haven’t.
That’s why your best bet is to drown out the noise and listen to the experts. We’ve been around the industry for a long time and have made some solid relationships with industry rock-stars – all of whom we’d be happy to introduce you to.
If you’re just looking for some good old getting-started advice, though, we’ve gathered our Top Ten First-Time HomeBuyers Mistakes to help you steer clear of some of the real estate pitfalls.
10. Not knowing your budget:
Perhaps the most important step in purchasing a home begins before you even call your first professional or make your first list of must-haves. Understanding your personal financial situation is the key to making wise financial choices- in real estate as well as everywhere else. This is the time that you make yourself a good budget and determine where – realistically – a mortgage would fit inside that budget.
You need to consider things such as insurance, utilities, repairs and renovations when you’re busy calculating what you can afford. When you have a solid understanding of where you are financially and a how the sales price of home translates into a monthly mortgage, you’re ready to move on to the next step.
9. Ignoring your credit report – and rating:
The difference between getting an loan and not getting a loan relies heavily on how you’ve maintained your credit rating in the past. And if you ARE approved for a loan – the difference between getting a good interest rate and a less-than-ideal interest rate really comes from that number that represents your credit report. Before you get to shopping for loans, taking a good hard look at your credit report will serve you well.
8. Not shopping around for programs
If you don’t take advantage of some of the programs that are available for individual situations – such as first-time-home buyer programs, VA programs or USDA loans, you may be missing out on some serious fiscal benefits. Talk with your lender about what loan your particular situation would be best suited for. It’s not a one-size-fits-all mortgage world out there – make sure you don’t fall into the trap of thinking that it is.
7. Not understanding your options:
There are a lot of professionals in the Real Estate world. From Realtors® to Mortgage Lenders and Title Agents, and all the pros in between, you’ll be utilizing the services of people who you’ve likely never met. It’s important to know that you have options in this matter – so do your homework and take control of the process before it takes control of you.
6. Not interviewing your professionals:
First step in taking control of the process is interviewing the professionals who could offer service to you. Not all Realtors®, Lenders and Title Agents are created equal. There are a lot of good ones out there, but that doesn’t mean that they’re all a good fit for you and your situation. You need to be comfortable with what’s going on – make sure you find people that help to cultivate that experience.
5. Not understanding the language:
You’ll get a LOT of new terms thrown your way during the home-buying process. Acronyms and what may sound like a foreign language are going to be a part of your every day experience now. Don’t just let that language pass you by! Ask questions. Do your research. If you don’t know what’s going on, figure it out – because this is YOUR TRANSACTION. Make sure you retain control of it. And if you’re not sure, ask the professionals. That’s what they’re there for!
4. Using all of your savings:
It may seem like a good idea to throw all of your money at your mortgage to lower your overall payment. Don’t do this! There are a lot of costs involved with home ownership, and they don’t all happen up front. While a down-payment can definitely be a great thing in some situations, in almost ALL situations it’s also a good idea to maintain a financial buffer for unforeseen expenditures or emergencies. Be wise! Don’t leave yourself house poor.
3. Shopping for your house before your mortgage:
It can be really tempting to jump online and check out what’s available before you even get started on the home-ownership process. But make sure that you’re not out searching for houses before you know what you can afford. Not only could you end up with a broken heart, but you’ll likely find yourself at the short end of a bidding war if you’re not prepared with a pre-approval from a credible lender. Do your homework and be at the front of the line when the right home appears!
2. Opening credit before you close:
This is a HUGE no-no. Your lender will likely check your credit report shortly before you close, and if you have a new line of credit on there (or even just an inquiry, depending on the situation), there’s a good chance you could jeopardize the entire transaction. DO. NOT. DO. THIS. Once you’re in the process of getting a loan, it is imperative that you may NO financial moves that could change the status of your credit situation. As tempting as that new car and/or new home furnishings may seem just wait until you close!
1. Not using Sutherland Title as Your Title Experts:
We saved this one for last because it’s the most important one on your list. Make sure that you put yourself in the hands of the industry experts – having a solid Title Company in your corner not only provides a safeguard for you, it helps get you in contact with other industry professionals as well. That’s the power of a solid foundation.