If you’re considering buying your first home, the first question that has probably run through your mind is, “where do I begin?”
When beginning your quest for homeownership, there are some important initial steps to take to ensure your final decision is the right one. From finding the perfect location to determining how to finance your purchase, there is a lot that goes into planning for what is more than likely the greatest investment thus far in your life.
These should be among the first steps in your home-buying process far before you ever even set foot at an open house:
- Get approved for a mortgage
- Find a real estate agency and title company
- Determine what your ideal home is within your budget restrictions
Now that you know the simple yet important initial steps for beginning the home-buying process, let’s dive into some of the most common mistakes first-time homebuyers make far too often that we hope you will avoid.
Buying A Home That’s Too Expensive
Many first-time homeowners think that if they can get approved for a mortgage for a home, then they can afford that home. This is is far from the truth as there are many more expenses involved with owning a home outside of simply being able to keep up with the monthly mortgage payments.
Property insurance, taxes, homeowners association dues, maintenance, and higher electric and water bills are some of the costs that first-time homebuyers tend to overlook when beginning their search for a new place. It’s also important to keep in mind that property taxes and insurance have the tendency to constantly rise year after year, so just because you may be able to currently afford a home doesn’t mean you will be able to afford the increased cost of it down the road.
Not Having An Emergency Fund
While many people know this, many seem to forget when going to purchase their first home — owning a home is much different than renting one. If something breaks, you have to fix it; not the maintenance guy and not the landlord — you. With that being said, when going to purchase a home ensure you leave enough wiggle room with your selection to save some extra each month in case the unexpected happens. If not, you better be quite handy!
Not Searching For First-Time Home Buyer Grants
In America, more often than not, there is a program to assist you in your big investment, especially when it comes to your first home purchase. There are a multitude of Government programs that exist for first-time buyers. All you have to do is look in the right places to find one that can potentially work for you.
These programs can range from down payment assistance, help with closing costs, and a whole lot more. While not everyone qualifies for such programs, it is certainly worthwhile to investigate to see if you do.
Not Rate Shopping With Multiple Lenders
Many people are deterred from the idea of shopping around and exploring their different options for lenders because they are concerned about the impact it could have on their credit report having multiple inquiries. FICO, the credit scoring company, allows for multiple inquiries from lenders within a 30-day period. This is known as rate shopping. This is so consumers can shop lenders for the best rates without affecting their credit score.
Our recommendation is to receive loan offers from a minimum of four to five lenders, comparing the interest rates and closing costs of each in order to ensure you are getting the best rate possible on your first mortgage.
Not Choosing Your Own Title Company
Many lenders won’t tell you, especially if you’re a first-time homebuyer, that you have the option to choose your own title company for your real estate closing process. Most lenders have a person they have worked with for ages and can be reluctant about working with other title companies or agents, so they leave this key information out when discussing the process of obtaining title insurance and closing on your mortgage.
The fact of the matter is, you are the buyer and you have the power! You don’t have to settle for the traditional daunting method of real estate closing with piles of paperwork. In fact, with a national title company like Close Happy® by Elevated Title™, you can even perform your entire home closing digitally through what is known as an E-closing. This makes the real estate closing process much more streamlined, efficient, and easy for everyone involved.
We hope you take this advice to heart when going about the endeavor of purchasing your very first home so that you don’t make the costly and stressful mistakes made by many who go into the homebuying process blindly. At Close Happy®, we want everyone to do just that — find the hope of their dreams and close happy.
If you’re interested in using Close Happy® for closing on your brand new home, talk to your lender about using a national title company, view more of the benefits of working with a national title company, and get in touch with us today for a free flat-rate quote for all of your title service and real estate closing needs!