The 10 Most Common Mistakes People Make When Buying Their First Home

Getting ready to purchase your first home?

Here are 10 things to avoid:

  • Not Budgeting for a Home Loan: Owning a home may be cheaper than renting in the long run, but it’s a hefty up-front investment if you’re planning to take out a loan. Make sure you know how much you can afford to pay each month.
  • Ignoring Your Credit Score: A solid credit score will help you go from renter to homeowner. Even if you’re great at budgeting and earn a decent income, a poor credit score may hurt your chances of qualifying for a loan.
  • Not Paying Attention to Housing Trends: The housing market fluctuates. Sometimes it favors the buyer, sometimes it favors the seller. Read up on housing supply and demand, as well as interest rates and price history in your desired neighborhood.
  • Shopping Before You’re Qualified: Don’t shop for a home before you’re pre-qualified for a mortgage loan. It will just lead to frustration and heartache. Meet with an accredited lender or mortgage advisor so you have a clear understanding of your price range.
  • Overlooking a Home’s Resale Value: It’s rare to buy a “forever” home these days. Therefore, it’s good to consider ahead of time whether you’ll be able to re-sell the home for a decent price – or maybe even a profit! – in the future.
  • Trusting an Unqualified Realtor: Hiring the right realtor is the most important step in your home search. Make sure that you’re working with someone who is savvy and well-versed not just in real estate, but the neighborhood of your dreams, too.
  • Betting on a Verbal Agreement: Nothing in home-buying is legitimate until you’ve got a signed contract. Don’t hang your hopes on someone’s word and a handshake. Get all details – requirements, agreements, prices and dates – on paper.
  • Disregarding Hidden Costs: Budget for all of the fees – obvious and hidden! – in the homebuying process. What’s a hidden fee? One example is the closing cost, which can include everything from attorney to title search fees.
  • Forgoing a Professional Home Inspection: Don’t rely on the seller or their real estate agent to point out any issues with the home. Hire a professional home inspector to check for damages, pest problems or any issues with the property.
  • Forgetting Other Related Costs: Just like buying a car, owning a home comes with long-term financial responsibility. Prepare yourself for things like association fees, insurance, taxes, utilities, and regular maintenance and upkeep.

Are you you in the process of looking for a first-time home? Let Cardinal Financial (formerly RedStone Mortgage) assist you in finding loan options that meet your individual needs. Call us today at 480-759-1500.

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