Buying a home for the first time gives the feeling of accomplishment. But due to a lack of knowledge, many of the first-time homebuyers make big mistakes that put them in trouble. In this article, I’ll talk about some of the biggest mistakes that most first-time homebuyers make so that you can save yourself from these mistakes.
3 Biggest Mistakes First-Time Home Buyers Make
1. Not Setting a Budget
One of the biggest mistakes that almost every first-time home buyer makes is that they don’t set a budget and start looking for their dream house. But it’s a complete waste of time. For example, if you have a budget of $200,000 and looking for a $500,000 house, at the end of the day, you won’t be able to buy that house.
On the other hand, you won’t be overspending when you have a fixed budget while buying your home. Again, by setting up a fixed budget, you’ll be able to keep your monthly mortgage payment at your reach. Besides, with a fixed budget, you’ll be able to search for your dream house easily.
The best way to set your budget is by using a mortgage calculator. With the help of a mortgage calculator, you’ll be able to know the monthly mortgage rates, taxes, impact of the monthly mortgage payment, and so on.
2. Discussing with Just One Lender about the Rate Quote
To get the best mortgage rate, you’ll have to be choosy and compare different lenders. But here, most of the first-time homebuyers make a mistake and spend more than what they needed.
Most of the first-time homebuyers are usually young, and they tend to get their mortgage loan from their bank. I am not saying that this is a bad idea, but as a buyer, you should always compare the mortgage rates and visit different banks and lenders.
As mortgage rates are personalized and depend on a few factors such as your financial ability, market conditions, etc., you may get different mortgage rates at different banks or lenders. If you want to get the best mortgage rates, you should at least talk to five to seven lenders and choose the best one among all mortgage rates.
3. Not Buying the Right-Sized Home
Many first-time homebuyers don’t understand their required home size and end up buying an oversized or small house. When you buy an oversized house, at first, you’ll have to pay more mortgage money each month. Secondly, a bigger house requires a lot of maintenance, and for that, you’ll have to spend more money and time. Again, many first-time homebuyers underestimate their need and buy a small house. But buying a small house also has some disadvantages. To get rid of this problem, you’ll have to first talk to your family members about their requirements and note them. Then consider the maintenance cost and time of your dream house. If you think that everything is aligned with your budget and requirements, you’re good to go.0