FIRST TIME HOME BUYERS PITFALLS TO AVOID

  • Falling in love with a house you can’t afford is a major mistake for first time homebuyers. Before you start shopping or viewing open houses, your first step should be to do a comprehensive analysis of your finances. Your first meeting should be with a mortgage broker or loan officer to examine your credit for inaccuracies and get a full picture of your income and expenses to get an idea of what type of monthly payment you would be more comfortable with.

 

  • Not seeking professional advice is one of the biggest mistakes a first-time homebuyer should seek to avoid. Buying a home is one of the biggest investments one will undertake in their lifetime and professional help should be sought early in the process, as it can get very complicated.

 

  • Applying for new credit and big purchases should be avoided at all costs as your debt-income ratio and credit score is what your lender will use as the biggest factor when issuing new loans. Applying for new credit can drop your credit score and new debt will certainly increase your debt to income ratio. A few days before closing your lender will check for any changes and if your credit score has changed negatively this could impact the closing and can result in changes to interest rate fees or even cancel the closing altogether.

 

  • The “pot of gold” does not exist in real estate. Finding that special property that fits all your needs is like looking for a needle in a haystack. Narrowing down your search can be very disastrous for you; it can lead to you overpaying in the hopes of finding that special property. All options should be explored as a first-time home buyer as other contenders should not overlook in the hopes of finding something better.