Buying your first home is both exciting and nerve-racking.
On the one hand, you finally get to settle down and make a home for yourself. But, it’s overwhelming to figure out which house fits within your budget. And there’s the issue of where to live!
Ideally, you’d like to find a place that checks off almost all the boxes on your list. You have a good idea of the area you’d like to settle down in, but you’d like to avoid first-time homebuyer mistakes.
Well, if you’d like to have smooth sailing without making errors, we can’t guarantee you won’t make any mistakes. But, the good news is this article can help steer you in the right direction.
Make wise decisions, and you should be able to find your dream home in no time at all!
1. Not Calculating Renovation Costs
At some point during your search, you may find a home that looks great but has renovation costs. Before making an offer, you should first get a quote on how much the repairs will cost.
When you get a quote from a contractor, assume that the quote is low. Extra expenses will likely come up, so you should assume that will be the case. It’s in your best interest to bake in extra money for any repair or home renovation.
For example, if the roof needs repairing, get a quote ahead of time. And, also make sure you get a quote from more than one roofer.
Also, ask friends and family for referrals. It’s vital to get a range of quotes so you can get a good idea of how much repairs will cost.
If you buy a house with a ton of renovations that you had no idea would be that expensive, you could get in over your head!
Make the home buying process as smooth as possible. You can do this by calculating hidden expenses ahead of time.
2. Making Emotional Decisions
At some point during your house hunt, you’ll likely come across a home you adore. You might like it so much that you tell yourself you can’t bear to part with it, no matter the cost.
It’s easy to let your emotions control your decisions, but it’s not wise if you act on impulse.
Buying your first home is a significant milestone, so you want to tread lightly. Ensure the house fits within your budget, and you’re not going with it because you want it.
There may be another appealing house that is more affordable. If it comes pretty close to your “dream home,” it may be a better fit.
Not every house is going to have precisely what you’re looking for, and if it’s over your budget, you may have to pass.
3. Not Confirming Gift Money
Did your mom and dad offer to give you money for your home? Or perhaps a great grandparent will gift you some money you can use for your down payment.
While it’s fantastic that you’re getting money to help pay for your first house, you have to make sure it’s lined up.
If the person who said they would gift you money doesn’t follow through, it could affect your loan.
Don’t assume that the money is going to come through. First, check with your parents, charity, or whoever else is giving you some funds.
When you receive your money, know the rules of down payment gifts.
For example, it’s essential to make a copy of the bank transfer or check. Lenders will want to see when you received the gift and verify it through your bank. They may also request to see a signed gift letter.
Making mistakes when buying a house can have disastrous results. So, do your best to navigate everything.
In addition to the three tips above, here are a few more mistakes you should avoid:
- Not realizing how much it costs to own a house
- Shopping for a house before knowing how much you can borrow
- Getting a new credit card before the mortgage closes
- Not looking into loan programs
- Paying too much for private mortgage insurance
As you can see, many blunders happen to first time home buyers. But rest assured, they won’t happen to you!
Do your research and find a top-notch real estate agent. Your smart choices will send you down the right path to finding a beautiful home.