Mistakes First Time Home-Buyers Make

People are in a home-buying frenzy now with home prices relatively low as are mortgage rates. Experts are predicting that more gains will be made within the housing market during the years ahead.

Along with the hot home-buying market come heavy competition for the homes and many are making all-cash offers. But, if you aren’t familiar with all the complexities of purchasing a home, you may have future financial regrets. There are five top mistakes that first-time homebuyers often make.

First, they don’t consider renting a home. Although purchasing a home is often the best financial decision you could make, it doesn’t work for everyone. For example, if you know you’ll only be in the home for a couple of years it may not make sense to buy after you amortize the closing costs for that time period.

Second, they don’t consider costs other than down payment. Homeowner’s insurance, maintenance or HOA (Home Owner’s Association) fees and closing costs may eat up your savings and leave you with no emergency funds.

Third, they don’t get a home inspection. A home inspection is no way to cut the costs of buying a home. The defects a home inspector may find far outweighs the price of a home inspector and you may save thousands of dollars on future repairs.

Fourth, they fully expect their home to appreciate in value. Many home buyers think if they dump their life savings into a home and keep it for a few years they’ll get a significant property. While a home equity is nice, the home is one of those assets that aren’t very liquid if you need money fast.

Fifth, they don’t consider debt-to-income ratio before looking for a lender. A lender considers this ratio when looking at your ability to pay for a home. If you’ve accrued too much debt, you may not be approved. Show a history of saving – not getting into debt before you apply for a home mortgage.

If you’re a first-time or novice home buyer, it’s imperative that you spend some time with an expert such as a trusted realtor before rushing in to the home-buying experience. They keep up with changes in current market values and how the various mortgage companies do business.

Home Buyers Guide

Who buys home for the first time will face many difficulties not only having to understand the process of buying a home but also having to know which type of loan suits them the most. Advice from well meaning loved ones can be helpful, but buying a home is a major financial commitment and you would be wise to educate yourself on the home buying process before taking the first step.

You should talk with a real estate agent since they can give you an expert advice when you have any queries regarding the decision to purchase a home. The purpose of this initial meeting is not to sign a representation agreement with the real estate agent, but instead to make yourself aware of local real estate customs in your particular area. If the agent has no time to discuss the home buying process with you, then keep looking until you find one who will. A good real estate agent will offer you information on the local real estate market and give you an idea of the types of mortgage products that are available to you. A mortgage broker or lender can also give you valuable information when you decide to buy a home.

The questions you should ask the real estate agent or mortgage broker include how to make an offer on a home you wish to purchase and the specifics involved in between making your initial offer and the final acceptance of the offer from the seller. Ask about the settlement costs, the down payment amount that you may need, and the length of time involved between the acceptance of your offer and the final closing date.

Make sure you understand your credit situation and what it means to you as far as applying for a mortgage. Down payment requirements and the interest rate you will receive are directly related to your credit score. You should be aware of exactly what is on your credit report before beginning the home buying process.

Buying a home can be stressful at times and that a calm attitude and the ability to cope with any issues that may arise calmly will make the purchase of your first home a more pleasant experience. The guidance will give you a good start in making wise decisions when you purchase your first home. Buying your first home is one of the most exciting events in your life. Give yourself the information you need and take the advice of experts when you begin the home buying process. The experience will be less stressful and you will benefit from the knowledge you have gained. We buy houses in Queens