With the housing market being extremely competitive these days, it is becoming harder and harder to secure a home. It is especially difficult for first time home buyers, as they do not have any experience and might be more prone to error. In this expensive and cutthroat housing market, any unnecessary errors will make the home buying process even more difficult. Therefore, it is essential to avoid these common first-time home buyer mistakes:
Being Pessimistic About Your Mortgage Approval
In a perfect world, you would have a fantastic credit score, plenty of savings, and very little debt so that you would be guaranteed an approval for a mortgage. However, we all know that this is rarely the case. If you are struggling in any or all these areas, that’s okay. It is important to be positive about getting approved for a mortgage. After all, there are many other options today, such as Federal Housing Authority loans. These are designed to assist both low-income and first-time buyers.
Talking to Just One Lender
When interviewing lenders, it is vital that you try speaking to more than one. If you don’t, you could miss out on a better deal. This is because the fees and rates can differ from lender to lender, as they will all offer varying services and products. It is recommended that a first-time home buyer talks to a regional credit union or bank, a big bank, and an online lender. This way, you can select the best deal.
Failing to Get Pre-Approved Ahead of Time
Getting pre-approved for a mortgage will not only make for a less stressful experience but will also give you a better idea of how much you can realistically spend on a home. In addition, it serves a competitive advantage, since it will show sellers that you are serious about securing a home.
Using the Entirety of Your Mortgage
Your lender will provide you with a maximum amount to spend on a home, but it is not a good idea to borrow all that money. You may run into additional expenses that can often pop-up during the home buying process, or unexpected changes to your income. If you do not max out on your mortgage limit, you will have more financial flexibility to cover these expenses. Overall, it will make you feel more secure.
Spending More Money Out of Frustration
Buying a home is not an easy task, especially for a first-time home buyer in a fierce housing market. As a result, it can often be a very frustrating experience. Homes will sell quickly, and you may lose out on a home that you really loved. These things happen though, and you shouldn’t get discouraged. More importantly, don’t go over your budget just to secure a home. Rather, keep looking and you are sure to find one that you will love just as much within your budget.
Letting Your Credit Score Change
Despite getting pre-approved for a loan, you are not guaranteed funding. If your credit score or income levels experience a radical shift between the time of pre-approval and the closing of the loan, lenders can invalidate their offer or change their terms. To be safe, keep track of your credit score and make sure all payments are made on time.
Consider Hudson Law Firm and UltraTech Title for Title Services when Home Buying or Working with Home Buyers
When you select Hudson Law Firm and UltraTech Title , you’ll work with a title agency offering cutting-edge tools to streamline your closing, so it takes place on time. If you’re a home buyer, lender or real estate agent who would like more information, please contact us today!