So you’ve gone over the pros and cons of renting versus owning a home and you’ve decided to buy a home. Congratulations! If you hadn’t figured it out yet, you will soon enough: The home buying process is stressful for everyone involved. That’s the bad news. Here’s the good news: You can take a lot of that stress out of the process by avoiding the most common mistakes of first-time homebuyers.
1. Check Your Credit: Even if you’ve planned for years to buy your first home, and even if you’ve been scrupulously careful about maintaining good credit, run a credit check before doing anything else. The recent holiday season, with its news of multiple security breaches at major retailers, was a sobering reminder that credit is a lot like driving: it doesn’t matter how careful you’ve been; all it takes is one bad egg to make your life very, very difficult. Knowing what’s on your credit report can allow you to address any issues that you may find on it. And if your credit gets a clean bill of health, congratulations. You’re ready for the next step.
2. Get Pre-Approved for a Loan: This is very important. After all, the last thing you want is to pin your time and your hopes on what could very well be your new home only to have the deal fall through because you didn’t get approved for a loan. Pre-approval signals to the Realtor and seller that you’re serious. Not only that, it enables everyone to be more comfortable negotiating home prices because everyone knows they’re not wasting time.
3. Don’t Rely On Verbal Agreements: There’s an old expression that says that an oral agreement isn’t worth the paper it’s written on. It’s a sad fact that while most people are trustworthy, we don’t always find out about the ones who aren’t ‘til it’s too late.
4. Spend Within Your Means: The recession that’s still making itself felt has taught many of us a very valuable lesson. In case you missed it, we’ll repeat it here: Spend within your means. The days of spending beyond our means is over. Spend within, or even below, your means. If you’re not sure, talk about your financial situation with a certified financial professional, and see how home ownership fits into your broader plans. Make sure that you’ve budgeted for fees (inspection fees, mortgage fees, moving costs, and more), mortgage payments, unexpected events (the loss of a job or a spouse, the birth of kids), and a bit of a cushion. You don’t want all your hard work to be lost to foreclosure.
5. Find the Right Realtor: The last, and perhaps most common mistake: Not finding the right realtor. Ask plenty of questions. And if it doesn’t feel quite right, say so, and feel free to find a Realtor who’s a better fit. After all, this is a relationship like any other, so each of you needs to be able to trust the other.
By Links Residential
