Research shows that first-time homebuyers constituted 33% in the US in 2019. This shows that many people aspire to become a homeowner and work towards this dream every year. However, if not managed properly, this experience could become a huge headache. Are you wondering how to avoid some common mistakes made by homeowners? Here are a few below.
1. Not taking into consideration the extra costs of homeownership
As a first-time homebuyer, you may be in for a surprise after your new property is handed over to you. Owning a home comes with extra costs aside from your monthly mortgage payments such as property taxes, insurance payments, and maintenance fees. Many first-time homeowners tend to make the mistake of overlooking these extra costs and not fitting them into their budget. It is therefore essential to be aware of these costs, so you’re not taken by surprise.
Your being location specific while purchasing a new home leaves a lot of impacts. For instance - someone wishing to buy a home in Palo Alto must be familiar with everything required for the same. This includes everything like - picking a suitable location to understand the difference between different types of homes. You can find out more here about such aspects.
2. Not having a home inspection
Since a home inspection comes at a price, many first-time homebuyers choose to skip this process because they have already seen the property. Also, some other first-time buyers do not know about this important step and as a result skip it. Having a professional inspect your home-to-be is beneficial since they often point out things you may have overlooked. If the home you are purchasing is an existing one, your professional inspector may quickly point out some costly repairs that you may not have noticed earlier. This will enable you to have a timely negotiation with the seller and fetch you a reduction.
3. Going way over budget
As a first-time homebuyer, the possibility of seeing a beautiful home and being instantly drawn to it is enough to make you ignore your initial budget. For many first timers, the hope is to find a loan with monthly payments that fit your budget and standard of living without any worries. Letting a home’s beauty get into your head can drive you to a point where there is a strain on your finances and peace of mind is a mistake you want to avoid.
4. Applying for credit before the final sale
As a first-time homebuyer, you need to keep in mind that the period between applying for a mortgage, finalizing your loan, and having your new home handed over to you is crucial. Lenders monitor your credit score and your debt-to-income ratio. The debt-to-income ratio is how much of your income goes toward monthly payments.
The mistake you want to avoid during this period is to apply for credit and start making purchases. Doing so reduces your credit score and adds up to the debt-to-income ratio, which will be noticed by your mortgage lender. This may influence your lender to change the interest rate or fees on the mortgage. In some cases, it may result in a canceled mortgage.
Identifying and avoiding these mistakes can be a bit overwhelming, so it is advisable to request the help of conveyancing services to ease up the process of home ownership. Have your dream come true without the stress!