10 Common (and Costly)Mistakes to Avoid When Buying Your First Home
Many life lessons are learned the hard way, but first-time homebuyers shouldn’t make costly mistakes that happen without proper research. Becoming familiar with the following common mistakes among first-time buyers will help you plan to avoid these expensive errors.
1. Overshooting Your Original Budget –
Buying a home requires evaluating your budget thoroughly to make sure you can afford future costs. First-time home buyers often fall into the trap of exceeding their budget when emotion overtakes reason. While you may get to live in the home of your dreams, you should also be cognizant if you’re able to meet mortgage payments and the rising cost of living.
2. Searching for a Home on Your Own –
Even though the internet and smartphones make it easy for individuals to search for home listings, it’s still important to work with a professional who knows the real estate market. Don’t work with just a listing agent who might be trying to sell at the highest price. Find a buyer’s agent who has access to listings beyond what’s published on websites.
3. Getting Just One Rate Quote –
Since homes imply high expenses for most people, it’s advantageous to narrow down your lending offers to a shortlist and then decide on the best quote. A NerdWallet study found that borrowers can save $430 in the interest the first year if they take time to compare rates of at least 5 lenders.
4. Making a Down Payment That’s Too Small –
Ideally, you want to pay as much of a down payment as possible to reduce your monthly mortgage payment. Another reason to avoid a small down payment is you’ll need private mortgage insurance until the equity surpasses 20 percent.
5. Emptying Your Savings –
It’s imperative to have savings or an emergency account set up before purchasing a home. You simply don’t know when you’re going to have to pay for an emergency that isn’t covered by home insurance.
6. Shopping for a House Before a Mortgage –
You need to know how much of a monthly mortgage payment you can afford before you start shopping for a home. Knowing your credit score and the amount of loan you can get approved for are important factors to be considered before you begin your search for a new home.
7. Not Considering Future Resale Value –
It’s common for first-time homebuyers to focus more on the short-term excitement rather than the long-term economics of making a home purchase. Some people have ideas of adding features to their exteriors to meet personal tastes, not realizing external additions don’t necessarily raise the property’s value.
8. Not Doing Random Home Inspections –
It’s crucial to catch overlooked vulnerabilities to a home by conducting a random inspection. You don’t want to sign a home deal and then find out later about leaky pipes that are expensive to replace. Make sure you know the condition of the entire property from a functional as well as an aesthetic perspective.
9. Not Bundling Insurance Policies –
Bundling insurance policies under one agency can save you money on all the various policies you pay for. There might be many additional costs that your standard home insurance plan doesn’t cover. Bundling can simplify each of your policies and prevent insurance bills from getting mixed up.
10. Skipping the Home Warranty –
It’s wrong to bypass a home warranty for multiple reasons, such as safety and savings. If a disaster damages your HVAC equipment without maintaining proper warranties, you will have to pay out of pocket for repairs that may cost thousands of dollars.
Following this guide can help first-time homebuyers avoid common mistakes. However, the key is to practice due diligence and follow a detailed checklist. To find the right insurance, contact the team at Little & Sons Insurance Services! Our dedicated team is ready to help you get the personal insurance you need.