Purchasing your first home is an exciting milestone and, considering the markets across the United States, it’s a great time to buy. However, home buying is no simple task, and many first-time purchasers fall into common, sometimes costly, traps.
So, before you start searching for your dream home, keep in mind the following do’s and don’ts:
- Get pre-approved. When shopping for a home, it’s important to know what kind of credit you have and your overall budget. In some cases, real estate agents won’t even work with you until you’ve been pre-approved for a mortgage.
- Get a real estate agent. While it’s true that real estate agents aren’t required to buy a home, they can be invaluable—especially for first-time buyers. A good agent will walk you through the necessary steps and offer market insight and specific advice.
- Get overexcited. It’s common for first-time buyers to act on their emotions. But when it comes to such a large purchase, acting on impulse can be dangerous and commonly leads to overspending. Experts recommend that buyers only close on houses they can see themselves in for at least five years.
- Get careless about money. When purchasing a house, you want to avoid making other big purchases before you are approved for a mortgage. In addition, many first-time buyers forget to budget for closing costs. Consider putting aside anywhere from 1 – 4% of the purchase price to cover them.
- Forget about other expenses. Keep in mind that your mortgage isn’t the only cost associated with owning a home. Property insurance, taxes, maintenance, electric and water bills are some costs that first-time homeowners tend to overlook.
- Deplete your savings. Everyone needs a “rainy-day fund” or a reserved amount of money to be used when when regular income is disrupted. Keep in mind that things in your home will need to be fixed or replaced.
Keeping these tips in mind will ensure that, when it comes time to sign on the dotted line, you made all the right steps to secure your dream home.
© 2017 Zywave, Inc.