Some common First Time Homebuyer mistakes that we frequently see when it comes to new buyers making offers on property in a busy real estate market include some of the following:
- Coming in pessimistic
It is easy to get discouraged when you have a lower credit score, or a lot of debt. But, even if your application is less than ideal, there is still a large chance you can still qualify for a home loan. The Federal Housing Authority has loans specifically meant to help-out low income and first-time buyers.
- Working with a questionable mortgage lender
All lenders can have vastly different rates and fees. Be sure to look at various types of lenders and various loan products and most importantly a lender who has solid reputation. A lender who can work effectively with both buyer and listing agents and can collaborate effectively to ensure a smooth real estate closing.
- Skipping the pre-approval process
If you are set on a house that already has a few offers, a pre approval could put you a step above the rest! Buyers that come equipped and already approved are taken more seriously and are seen as people ready to buy a home. You will already have all your documentation and credit ready in advance!
- Going over budget just because you can
When you get approved for a loan and end up finding a house for less, you can lower your loan amount. Having that extra income can help cover other costs of owning a home. Come prepared with a realistic limit in mind so you don’t end up overextending yourself!
- Letting your emotions get the best of you
It’s easy to fall in love with a house and have you heart set on buying it, but make sure you don’t get caught up in the process and end up paying way too much. If the price increases to way over your budget, take a step back and really contemplate if it’s worth it. Don’t skimp out on inspections just because it will increase your chances of getting the house.
- Applying for other forms during the loan application process
Making big purchases on credit, buying a new car, or opening a new credit card before your loan has funded can all affect your credit score and in turn, affect you loan outcome. If your credit score decreases, lenders can change your loan terms, and it can drastically affect you interest rate. Be patient and wait until your loan has funded before switching jobs or buying new furniture for your home.
