First-Time HomebuyersAs a first-time homebuyer, you are starting an exciting process that can be daunting at times. However, you can speed up the homebuying journey and avoid heartache by familiarizing yourself with these top first-time homebuyer mistakes ahead of time.

Mistake #1: Overspending on a Home

Overspending on a home happens in many ways. You can purchase a home at the very top of your budget, spend all your savings on a down payment, or neglect to calculate the extra costs of homeownership.

Buying a home may be the biggest purchase you make in your life. And it can feel overwhelming to deal with such a large amount of money. So, it is important to keep the finances of purchasing a home in perspective and not to overspend.

Remember that a mortgage payment will replace your rent. However, you will also have homeownership costs, such as insurance costs, repairs and maintenance, and HOA fees. Previously while you were renting, a landlord may have covered significant repair costs, which will become your responsibility as the homeowner.

Try to avoid focusing on how much you can borrow to buy a home. Instead, think about the monthly costs you can reasonably afford while paying a monthly mortgage, maintaining the home, and meeting all your financial obligations.

Mistake #2: Not Performing Your Own Home Inspection

Sellers often have home inspections done before they put the home on the market. This, however, does not mean that you should trust the results of their inspection. Since a home purchase is such a significant investment, you need to have a professional perform a home inspection before you close on any property.

Home inspections can bring to light problems that are not visible when walking through a home, which can include foundation damage and building code violations.

If your home inspector discovers significant issues before the sale closes, you can negotiate the repairs, or in a worst-case scenario, you can back out of the sales contract.

Mistake #3: Not Thinking About Your Credit Score

If you start thinking about your credit when you are ready to apply for a mortgage, it may be too late to make changes to get the best interest rate. Ideally, it would help if you started thinking about your credit and cleaning up your credit report months before shopping for a home mortgage.

Regardless of when you want to buy a home, it is important to check your credit score and review your credit report. Sometimes there can be mistakes on your credit report that cause your score to be lower, that when corrected, may result in a higher credit score, which can result in a lower mortgage interest rate.

Related: 6 Simple Ways To Raise Your FICO Credit Score

Mistake #4: Failure to Save for a Down Payment and Closing Costs

Buying a home is more than just paying the cost of a monthly mortgage. Many homebuyers have a down payment, and most pay closing costs.

Unless you qualify for a zero down payment home loan, you could pay between 3% – 20% of the purchase price for a down payment. And closing costs can run between 2% – 5% of the loan amount.

With a basic understanding of the funds needed to buy a home, many homebuyers start saving years in advance of a home purchase. As time grows nearer to purchasing a home and you get with a mortgage broker to be pre-approved, you will learn more about different types of mortgages, the down payment required, and closing costs.

Mistake #5: Not Reviewing Different Mortgage Options

As a first-time homebuyer, there are different financing options available, including low down payment mortgages.

Some of the down payment mortgage options include:

Do your research and talk to your mortgage lender to make sure you get a mortgage that is best for you and your specific circumstances.

Mistake #6: Shopping for a Home before Getting Pre-Approved for a Mortgage

When you decide to buy a home, it is tempting to call a Realtor and want to schedule showings right away. However, home sellers and real estate agents may require you to be pre-approved before they show you homes for sale.

So, you want to talk with a mortgage broker and be pre-approved for a mortgage at the very beginning of your homebuying process. At that time, you will learn how much you can afford to pay for a home, and you will learn about the down payment and closing costs.

This is invaluable information for a first-time homebuyer. By starting with a mortgage pre-approval, you can give yourself a clear boundary for how much you can spend on a home while providing sellers more confidence in your ability to close on a home.

Marimark Realty

Marimark Realty, home to the top South Tampa Realtors, focuses on providing a personalized experience for buyers and sellers of real estate. As a full-service real estate agency, we help clients with luxury homes, homes for first-time homebuyers, commercial property, and investment property.

To begin the journey of purchasing or selling your home, or purchasing commercial or investment properties, contact us at your earliest convenience.