Buying a home for the first time can be nerve-wracking for any and all reasons, from making a large financial commitment, to worrying about picking the right neighborhood for your needs. When it comes to buying a house, here are some tips, tricks, and concerns to keep you from making the same mistakes that many home buyers find themselves regretting eventually.
Not Saving Enough for the Down Payment on Your New Home
It is not always necessary to put 20% as the down payment for a new home, but it is the industry standard at times. However, professionals and experts will advise buyers to put down even more than 20% in an especially competitive market. Trends of2020 and 2021 suggest that the real estate market will continue to exist at its current competitive state.
In contrast, some buyers only put down 8-12% on their new home. This shows that this is something that will ebb and flow with the market through time. The fast paced nature of real estate during a chaotic time for the market is not always easy to navigate. It will be easier to handle when properly prepared. It is important to have enough money saved for your down payment to give yourself wiggle room throughout the process.
Not Getting Preapproved for Your Mortgage
A mortgage preapproval is a letter from your lender of choice that shows your financial history has been evaluated by a professional. This shows you what price range you will be able to afford when buying a home. Preapproval also shows others that you are a serious home buyer looking to make a move. Being preapproved allows you to search for a mortgage lender that will most suit your needs. Overall, it causes a less stressful home buying process.
Additionally, shopping around when looking for a lender can help potential homeowners get the feel for the best deal available to them. While many Americans consider just one lender, keeping your options open is viable when searching for the absolute most out of the deal.
Getting the Wrong Type of Mortgage
Following trends when making a huge life decision is not advisable. While a30-year mortgage is the standard for many people, it is important to research your options. For example: If you find yourself able to handle a 15-year mortgage, taking that route might mean you could pay less for your home in the long run.
However, a fixed-rate 30-year mortgage might suit you much better when concern about a fluctuation in mortgage rates is present. Interest rates and the advantages of both short and long-term loans are the types of factors to consider and research before making a commitment.
Using the Wrong Lender
When getting into a long term deal like a mortgage, it is only natural to want the most foolproof way of doing so. When looking for the right lending situation for yourself and your family, take time to research. There are different types of mortgages that may be most suitable for your particular scenario. Working with a great real estate agent and developing that relationship during your house hunting process. Similarly, choosing the right mortgage lender is another important relationship.
The right lender for you will focus on helping you understand everything you are getting into. Lenders who want to rush you through the process without a clear explanation are a red flag.
Ideally, the right lender for you works with your best interest in mind. Your options for a down payment and mortgage term will be in line with your goals and finances. Ultimately, your final choice will feel like the right one.