First-time home buyer mistakes

As we age, it’s a lot easier to see recognize the missteps of our youth for the foolish mistakes that they were,

especially when it comes to our finances. While these types of gaffes tend to be a part of growing up and growing

wiser, when it comes to purchasing your first home, it’s worth having a bit of awareness regarding the most common blunders that first-time buyers tend to make.

1.) TAKING EVERYTHING THE BANK WILL GIVE YOU. Sure,

you may be approved for an excitingly large loan; however,

approval does not mean that you should take the loan and make a mad dash for the most expensive home you can find. Prudence is important, which means it’s generally wise to take 20% less than the bank is willing to lend. No one wants to find themselves in a position where they’re not sure if they can make their mortgage payments on a regular basis, so make a point to purchase a home well below the maximum you can afford. The added peace of mind will make owning your own place that much more fantastic.

2.) BE CAREFUL WITH EXTRA-LOW, SHORT-TERM ADJUSTABLE MORTGAGE RATES. Yes, low interest

rates are appealing, but that doesn’t mean you should overlook the fine print that basically says, “Things

won’t always be this cheap.” Creative financing, balloon payments, and teaser loans all exist to get

buyers on board with payment plans that are deceptively comfortable; however, the truth is that you

may be risking failure if, without a fixed payment, your adjustable mortgage crosses into unaffordable

territory.

Plain and simple, a fixed mortgage will be the same 10 or 15 years down the road—regardless of

changes in the market or the economy—which will make it easier to securely budget for both the

expected and the unexpected.

3.) NEVER EMPTY YOUR CASH RESERVES ON A DOWN PAYMENT. You’ve been saving for

months—even years—in the hopes that when the perfect home presents itself, you’ll be ready with the

down payment. While saving is smart and something every savvy homebuyer should do, it’s important

to consider the extra expenses involved in accruing a new house.

The down payment and closing costs simply cover what you owe upfront. From there, you’ll also have

to have extra cash for things like appraisal fees, buyer’s broker fees, loan application fees, inspection

fees, homeowner’s insurance, property taxes, HOA fees, etc. You don’t want to be left with an empty

bank account by the time everything is said and done, so it’s wise to save for these costs in advance.

4.) DON’T GET HUNG UP ON FORECLOSURES. Distressed properties often look like great deals on the

surface. Sure, you may have to put in a bit of sweat equity to get things looking—and working—the way

you want them to, but it’ll save you thousands! While this is clearly appealing to certain buyers, if

you’re looking for a move-in ready home that’s listed for a great price, you may want to stay away from

foreclosures and short sales.

Due to the fact that these homes are often tied up in bank bureaucracies, settling upon a speedy closing

date can take months and may require more hoop jumping than you’re willing to do.

5.) TALK TO THE NEIGHBORS BEFORE YOU BUY. You may have heard this recommendation before—in

fact, I’ve said it—however, it’s worth repeating for the simple fact that your neighbors have the power

to greatly influence not only your home’s resale value, but your everyday sanity as well.

No one wants to move into a home, only to find out that their neighbor to the west has a propensity for

bagpipes, while their neighbor to the east entertains a non-stop parade of friends. Yes, knocking on

people’s doors to get some more information about the neighborhood may seem a bit awkward at first,

but you’ll appreciate the advanced heads up when it comes time to buy.

CONCLUSION

At the end of the day, your biggest protection against making some rather large first-time homebuyer

mistakes is the addition of an experienced Realtor by your side. A great real estate agent will not only

be able to steer you in the right direction, but can offer referrals for reputable lending professionals who

will make sure you’re kept in good hands.

Purchasing a home for the first time is a huge investment, so if you’d like some advice or guidance

during the process, I would love to offer my services. Please feel free to call me at 678-778-6551 or send

me an email at HelloPamEvans@gmail.com.

Pam Evans | Hello Pam Evans Real Estate | www.HelloPamEvans.com | 678-778-6551