Becoming a first time home buyer is an exciting development. For many, this purchase represents a lifetime of dreams, savings, and hard work. Avoiding these five common mistakes by first-time home buyers will help you avoid unnecessary stress as you navigate this life-changing transaction.
At the end of the day, you are making a huge commitment that will affect your life for years. It is important to understand these common pitfalls to ensure that this decision is one that you are satisfied with.
Buy More Home Than You Can Afford
Becoming a home owner is more than just taking out the first mortgage. If your monthly payments stretch your budget to the breaking point, it can cause psychological anxiety and prevent you from being able to comfortably pay for other things you need.
Owning a home is a big commitment, financially and otherwise. You are responsible for managing your property, dealing with regular care and maintenance. Roofs were leaking, windows were broken, and pipes were bursting. Do you have enough savings–and the necessary energy–to fix these things?
Plus, the bigger the house, the bigger the utility bills, with heating and cooling costs taking a chunk out of your wallet. Property taxes add extra costs to your monthly budget, and
Plus, the bigger the house, the bigger the utility bills, with heating and cooling costs taking a chunk out of your wallet. Property taxes can add extra costs to your monthly budget. Because they are directly related to the value of your home, the more expensive the property the greater your subsequent obligation.
Experimenting with TipRanks’ mortgage calculator will help you understand the contours of your potential mortgage, your monthly payments (including insurance, estimated property taxes, and homeowner’s association fees) , and the total cost of this loan. Make sure it’s one you can afford.
Ignoring the Neighborhood and World
The home you buy will likely be your center of gravity for a few years, at least. Make sure you and your family feel comfortable building a life in your new community.
While it can easily be carried over to particular property, no individual or family is an island. The surrounding environment will also be a part of your daily life, so it is important to do some research to find out if the area is to your liking. This includes your overall feel and comfort level of living in the neighborhood, but can also include researching schools, parks, and public transportation options.
A primary residence is not just an investment property, or a springboard to another home in the future. Even if down the road you sell your home and upgrade to a better property, you will still be living in your current home for the foreseeable future. Make sure it’s one you feel comfortable calling a home.
Allowing Perfect to Be the Enemy of Good
Buying a home is a big purchase, one that requires a great deal of sacrifice and effort. It’s natural that you don’t want to settle for anything, but waiting for the perfect combination of size, zip code, age, and every other consideration under the sun, can mean never making a popular.
Consider the most critical aspects of your future home. By determining the absolute requirements for your home, you also take the time to reflect on where you are willing to compromise. This will help you narrow down your search, while simultaneously giving you the freedom to pursue properties that satisfy the most important criteria for you and your family.
Continuing your quest until all your stars align can be beyond frustrating. It can also translate to never owning a home.
Misappropriation of Government Finances
There are several federal government programs designed to help homeowners from many different walks of life.
For example, the Federal Housing Authority (FHA), provides mortgage guarantees for those looking to purchase their primary residence. FHA will insure up to 96.5% of your loan, meaning if you work with a qualified lender you may be required to provide a down payment of 3.5%.
The Veterans Administration (VA) also provides loan guarantees to private lenders. The VA program allows veterans, active duty service members, and eligible spouses to purchase a home with no money down.
The United States Department of Agriculture (USDA) has several programs designed to help rural homebuyers establish a life in less populated areas. USDA offers direct loans and loan guarantees.
Many states also offer home purchase assistance programs, so make sure you investigate all of these options before you decide.
Do Everything Yourself
There are many professionals who dedicate their working lives to helping individuals buy and sell homes. These experts have built up a lifetime of experience working on problems and issues that can cause major obstacles for first-time and experienced buyers.
Working with a trusted advisor can help you overcome the financial, regulatory, and logistical hurdles inherent in an economic transaction of this size. Details are important, and you may not be able to consider all the various issues involved if you choose them yourself.
If you’re not sure who to turn to for help, do some research online to see who has good reviews, ask for recommendations from your social groups, or even consider visiting one or two open houses to have personal conversations with real estate agents. .
Their job is to help you navigate this process. Don’t be afraid to work with them to do so.
Conclusion: There’s No Place Like Home
Your home is more than a physical structure, more than four walls and a roof. Rather, it is a place of refuge, comfort, and recreation.
There are many questions surrounding your home purchase, some of which can cause stress and anxiety. Finding the best fit for you depends on a number of different considerations that you should be sure to take into account.
As you pursue your dreams of home ownership, be sure to avoid making these common mistakes. This will make your journey less bumpy, and ultimately increase your chances of success.
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