Avoid these financial foes when looking to buy a home for the first time.
Making the transition from renting to homeownership is an important (and exciting!) financial milestone for many adults. As one of the most (if not, the most) expensive things we’ll ever buy, we want to ensure that we go into the deal levelheaded, realistic, and financially prepared. However, it’s not always as smooth as we’d like it to be. Buying a home requires a certain amount of research and planning, especially if it’s your first time. First-time homebuyers should be wary of committing these common money blunders.
Not Checking Your Credit
Before you even start checking home listings in your area, you need to check your credit to ensure you’re in a good position to buy. If your credit history is non-existent or your score is lower than average, you’ll want to put in the time to perfect these issues before going to a lender. If you do qualify for a home loan with a less than stellar score, you’ll likely end up paying a much higher interest rate.
Focusing on Price
It’s easy to focus on the listing price when you’re a first-time buyer. However, that’s just the tip of the iceberg. There are appraisal and inspection fees to consider, as well as closing costs for the loan. Homeownership is an expense in itself and many first-time buyers forget this. Once you’ve closed the deal, there are expenses such as homeowners insurance, property taxes, and maintenance and repairs to face, too. Make sure there’s room in that budget to accommodate these costs.
Choosing the Wrong Kind of Mortgage
While a traditional 30-year mortgage is the most popular type of home loan, it’s not the only option for buying your first place. If you are able to put down a sizable down payment, you may consider choosing a 15-year mortgage instead. Your mortgage will be dependent on your financial landscape as well as what your long-term plans are.
Luckily, Dean Rathbun can help you find the right mortgage for your needs. Whether you’re a first-time homebuyer or you’re seasoned in real estate, we can help. Contact us or give us a call at (888) 455-2847 to get started.