First Time Homebuyer?
Avoid these 6 rookie mistakes.
Buying your first home is a major milestone and life-changing event. You’ll be covering unfamiliar territory in a short time frame, learning new terminology, meeting contractual obligations, and making important decisions. Get ahead of the game by avoiding these six mistakes.
Not even starting
You want to buy a house, but you’ve heard there’s no way you can qualify for a loan. Your credit score isn’t high enough. You don’t have enough saved for a down payment. You’re self-employed. Unless you heard this from a mortgage loan originator who analyzed your income, assets, and credit, don’t believe it. Just because a friend or family member said you need a certain credit score or a certain percentage of a home’s sale price as a cash down payment doesn’t make it true. Get the facts by meeting with your licensed CrossCountry Mortgage loan officer.
Looking for houses before discussing financing
The exciting part of buying a home is finding the house, condo or townhouse of your dreams. But here’s the deal: Unless you know how much you can afford, you are setting yourself up for disappointment when you fall in love with a home you can’t buy. In addition, a good Realtor® will insist you have your financing squared away before you look so you can focus on the right properties. Think financing first!
Working without a Realtor®
The internet is a wonderful thing. You can look at thousands of properties. You can take detailed virtual tours. You can research cities and neighborhoods down to the micro level. Why bother to have a Realtor® represent you? First, a knowledgeable real estate professional will help you narrow your search to properties you like and can afford. Second, the purchasing process is complicated, so you need someone who understands contractual language and deadlines. Third, you will need other professionals, like a home inspector, and after your close you may need a plumber, a roofer, or an electrician. Realtors® have contacts and can make recommendations. Finally, real estate transactions are human interactions. Negotiations may become complicated. There may be after-sale issues. You need someone experienced, levelheaded, and tenacious in your corner.
Ignoring your lender’s advice
When your loan originator tells you how much you can borrow, and which loan program(s) will work for you, you’ll also hear what you need to do to maintain your ability to take out the loan. Listen carefully and follow the instructions to the letter. If you change jobs or even the way you are compensated at your job (salary to commission, for example), or you open a new credit account, or you deposit a large sum of money into your bank account, you may wreck your deal. Always check with your loan originator first before doing anything related to money or credit during the mortgage process.
Letting your heart rule your head
When you fall in love with a home, you may ignore warning signals that would normally make you pause. You may gloss over things that, if you saw them at a friend’s house, would make you wonder why they put up with them. Your home is a long-term relationship. Consider carefully before you commit.
Not budgeting for expenses
When you’re a renter and the pipes burst, the furnace dies, or the roof leaks, you call the manager or property owner. When you own a home, that’s you! Remember, if you take out a fixed rate loan, your principal and interest payment will be stable, but insurance and property taxes will probably (almost certainly) increase over the years. You’ll need more money for those items. Make sure you understand the ongoing costs of homeownership and be prepared to budget for both expected – and unexpected - expenses.
Ready to avoid these pitfalls and take the first step toward a stress-free mortgage process? Contact your licensed CrossCountry Mortgage loan officer today!