12 Mistakes of first-time homebuyers

 Mistakes of first-time homebuyers do not do this.

Here are 12 common consumer first impressions and how to avoid them:

You are looking for a home before applying for a mortgage.

We are talking to only one lender.

You are buying more housing than you can afford.
Very fast-moving.
Withdrawal of savings.
Neglect of debt.
I am repairing a house over neighbors.
Emotional decisions can be made.
If you think you need a 20 percent lower payment.
Waiting for ‘buffalo.’
We are considering loans from FHA, VA, and USDA.
Incorrectly calculate hidden property costs.
I am not earning gift money.
Consumer discount is not negotiated.

1. You are looking for a home before applying for a mortgage

Many first-time buyers start looking at homes before coming in front of a lender. In most markets right now, housing counts are still strong because there is a greater need for buyers than less expensive homes on the market.

In such a competitive market, you could lose the property if you were not authorized to lend money, said Alfredo Arteaga, a loan and mortgage chief executive in Mission Viejo, California. It is also possible that you do not have an accurate picture of your budget.

How it affects you: You may be behind the ball when your favorite home enters the market. And you can look for families that you can't afford.

What to do instead: "Before you fall in love with that beautiful dream house you've been watching, make sure you get the full written approval," Arteaga said. The first approval sends the message that you are an essential consumer with debt and overdrafts to get a successful loan.

2. Talk to only one lender

First-time buyers often get a loan from the first (and only) lender or the bank they are talking to, which is a big mistake. You may have left thousands of dollars on the table.

How this affects you: The more you shop, the better the basis for comparisons you will need to make sure you get a good deal with low prices.

What to do instead:

1. Buy at least three different creditors, as well as a real estate agent.
2. Compare prices, loan rates, and loan terms.
3. Do not undermine customer management and lending responses; both play an essential role in making the asset's approval process more efficient, especially now that applications back many lenders.

Lower interest rates have led to more people applying for loans, with some lenders far behind on loans than others. Our collateral level tables are a great place to start comparing purchases.

3. Buying more housing than you have

It is easy to fall in love with homes that may stretch your budget, but overworking has never been a good idea. With rising domestic prices, it is essential to stick to your account.

How it affects you: Buying a home beyond your means can put you at greater risk of being banned if you fall into difficult financial times. You will have less room in your monthly budget for other expenses and expenses.

Instead of focusing on what you can pay each month instead of adjusting your loan amount. Just because you can get a $ 300,000 loan doesn't mean you can pay the monthly payments that come with it in addition to your other financial obligations. Every borrower's case is different, so consider your entire financial profile when deciding how much to buy. Similarly, it is essential to be completely honest with your lender or the seller of your property regarding your finances. You will have to pay back what you borrowed, and you do not want to have to pay for something you did not pay.

4. Great speed

Buying a home can be complicated, especially if you get into the thick of the mortgage process. Speeding up the process could cost you a lot of time, says Nick Bush, a Realtor with Keller Williams Realty in Rockville, Maryland.

"The biggest mistake I see is not planning enough in advance for their purchase," Bush said.

How this affects you: Speeding up the process means you may not save enough to pay down and cover costs. Prompt closure can keep you from dealing with your credit report issues that prevent you from getting approved loan terms.

Instead, what to do is a map of your home buying timeline at least a year in advance. Keep in mind that it can take months - even years - to fix a bad debt and save enough for a minimal payment. On average, most buyers can save only about $ 5,000 a year to buy a home. Work to increase your credit score, pay off debt, and save extra money to put yourself in a more favorable position.

5. Withdrawal of savings

Spending all your money or savings on low payment and closing costs is one of the first significant consumer mistakes, says Ed Conarchy, a mortgage planner and investment adviser at Cherry Creek Mortgage in Gurnee, Illinois.

"Some people spit all their money together to pay 20 percent, so they don't pay for property insurance, but they create the wrong poison because they are left with no money at all," Conarchy said.

How it affects you: Homebuyers, who put 20 percent or more down do not have to pay property insurance when they receive a regular mortgage. That often translates into significant savings on mortgage payments, but it is not worth the risk of living on the edge, says the Monarchy.

What to do instead: Plan to have three to six months of living expenses in the emergency fund, even if you have closed. Paying insurance for non-liability assets is wrong, but ending your emergency savings or retirement to make a higher payment is a significant risk you should avoid.

6. Neglect of debt

Lenders pull credit reports on pre-approval to ensure the items are inspected again just before closing. They want to make sure that nothing has changed in your financial profile.

How it affects you: Any new loan accounts or credit card accounts in your credit report could jeopardize the loan's closing and final approval. Consumers, especially the first time, often learn this lesson the hard way.

What you need to do instead:

1. Keep your current financial situation from pre-approval to closing.
2. Do not open new credit cards, close existing accounts, take out new loans, or buy too much from existing credit accounts in the months leading to applying for a loan on the closing date.
3. Pay your existing balances below 30 percent of your available credit limit, pay your bills on time, and complete each month.

7. Repairing a house over a neighbor

Of course, you want a home that explores things on your wish list and meets your needs. However, being nitpicky with home cosmetics can be less noticeable if you end up in an area you hate, says Alison Bernstein, president and founder of Suburban Jungle, a clothing company.

"Choosing the right city is important for your health and the development of your family," said Bernstein. "The goal is to make you and your children a place where the culture and values ​​of this (place) are the same as yours. You can always trade down or down to find a new home, add a third bathroom, or renovate a basement."

How it affects you: You may end up loving your home but hating your neighborhood.

Must doing:

1. Find a real estate agent who wants to help you keep track of neighborhood safety statistics and school standards.
2. Limit your travel time and take things like getting close to public transportation and comfortable travel.
3. Visit your local area at various times to get a sense of traffic, neighborhood contact, and the perfect vibe to see if it is an attractive place for you.

8. Making decisions based on emotions

Buying a home is a lifelong pursuit. It is where you will make memories and build a truly your space, and put roots. It's easy to become overwhelmed and make decisions that affect your emotions, so remember that you are making one of the most significant investments in your life, says Ralph DiBugnara, president of the Right Home for New York City.

"Since this is a strong retailer market, many buyers are just starting to bid on what they are comfortable with because it takes them longer than usual to find homes," DiBugnara said.

How this affects you: Emotional decisions can lead to overpopulation.

9. If you think you need a 20% lower payment

The long-held belief that you should pay 20 percent (usually) is a myth. While spending 20 percent helps you avoid paying for private property insurance, many consumers today do not want (or cannot) invest that much. In-city payments are 12 percent, according to the National Association of Realtors, and 6 percent for first-time buyers. Some communities, such as co-ops, condos, and HOAs, may require large, low fees and must check with your real estate agent about specific social needs and budgets accordingly.

How it affects you: Delaying your home purchases by saving 20 percent can take years. It can prevent you from pursuing other financial goals such as raising your retirement savings, adding to your emergency fund, or paying off high-interest rates.

 What to do instead: Consider some mortgage options. You can put less than 3 percent down on a typical mortgage (note: you will have to pay for private property insurance). Some government loans that require insurance require a 3.5 percent down, but in some cases, you may not be able to protect the loan without paying it at all. Also, check with your local or state housing plans to see if you qualify for a home-based mortgage program.

10. Waiting for the unicorn

Unicorns are mythological creatures in nature and the marketplace. Before looking for a house, check your boxes for perfection can narrow down your choices too much and lead you to pass on good, appropriate options hoping that something better is coming.

How it affects you: Perfectionism can limit your property search or lead to overpopulation. It can also extend your home search.

What you should do instead: Keep an open mind about what's on the market and be willing to put in a sweat balance, says DiBugnara. Some loan programs allow you to pay the cost of repairing your mortgaged property.

11. Considering loans from FHA, VA, and USDA

First-time buyers may have more money in the home price range, and if you have less money to pay off or your debt is not a star, you may have difficulty qualifying for a regular loan.

How it affects you: You may think you have no financial options and delay your home search.

What to do instead: Look at one of three government-sponsored loan programs supported by the Federal Housing Administration (FHA loan), the U.S. Department of Health.

An FHA loan requires only 3.5 percent down with a minimum loan rate of 580. FHA loans can fill a gap for borrowers who do not have high credit or small savings. The biggest problem with these loans is compulsory mortgage insurance, which is paid annually and on closing.

VA loans are supported by a VA of eligible active members and senior military members and their partners. These loans do not need to be repaid, but some borrowers may pay off the loan. The VA loan is provided by private lenders and comes with a loan amount for the lender to keep borrowing costs less expensive.

USDA loans help low-income and low-income lenders to buy homes in rural areas. You must purchase a home in the appropriate USDA area and meet certain income limits to qualify. Some USDA loans do not require repayment by eligible borrowers with low income.

12. Correctly calculate the hidden costs of homeownership

If you are shocked to see your new monthly principal and interest, wait until you have included other home expenses. As a new homeowner, many additional costs can be budgeted for, such as property taxes, property insurance, homeowners insurance, accident insurance, repairs, maintenance and services, and more.