Buying your first home should be an exciting experience, but things could go awry if you’re not prepared.
- Not getting your finances in order
A down payment isn’t all it takes to purchase a home. Credit scores determine the interest rate and insurance costs on a new home purchase, not to mention pre-buying costs like appraisals and inspections.
- You make a large purchase before closing
Step away from the new car and put down the credit card. Lenders will re-check your debt load right before closing and if you’ve recently purchased a brand new car they might rethink your ability to pay off the home loan.
- Underestimating home improvements
No – you are not Joanna and Chip Gains and yes – that fixer-upper is going to be a pain in your butt. Just because it looks easy on TV doesn’t mean a fixer-upper is a right choice for a first home. Projects often take longer and cost more than you originally thought.
- Taking a short-term outlook on your purchase
Ask yourself, are you going to have kids one day? Will you be getting married? What about a yard for future pets? Even if it’s not in your immediate future, your new home should cater to your “what-ifs” in life.
- Working with the wrong real-estate agent
Not all real estate agents are created equal. Googling “a real estate agent” in your area is easy, but do they have the tools to meet your needs? Do you get along personality-wise? Take the time to interview a few agents! Buying a home is the largest purchase you’ll make, so choose wisely.