Buying a new home is one of the biggest financial decisions you will make in your lifetime. It’s exciting yet quite overwhelming. It’s important to do your research before you start house hunting and making offers. Even the smallest mistake can cost you thousands of dollars in the long run. As a first-time homebuyer, avoid these 5 costly mistakes.
In this guide, we’ll go through the five most costly mistakes to help you make an informed decision and buy your dream home with confidence.
Buying without a Pre-Approval
One of the biggest mistakes you can make as a first-time homebuyer is to start house hunting without a pre-approval. A pre-approval is a letter from a lender that shows you’re approved for a certain amount of money to buy a house. Without a pre-approval, you won’t know what your budget is, how much you can afford for a down payment, and what your monthly mortgage payments will be. It’s important that you get a pre-approval before you start looking for houses so you can avoid falling in love with a home that’s out of your price range.
Skipping the Home Inspection
A home inspection is a crucial part of the home-buying process. It’s a visual inspection of the house to identify any issues or problems that need to be fixed. Skipping a home inspection can be a costly mistake. You may not be aware of hidden issues with the house that could end up costing you thousands of dollars in repairs. A home inspection gives you peace of mind that you’re making a sound investment.
Not Shopping Around for a Mortgage
Don’t make the mistake of going with the first lender you find. Shopping around for a mortgage is important to make sure you get the best rates and terms. Even a fraction of a percent can add up to thousands of dollars over the life of the loan. It’s important to compare different lenders and their mortgage products to find the best one that suits your needs.
Underestimating Closing Costs
Closing costs are the fees that are paid at the settlement of the real estate transaction. They can vary from 2% to 5% of the purchase price of the home. Many first-time homebuyers make the mistake of underestimating the closing costs, which can be a costly mistake. It’s important to understand what closing costs are and what they include so you can budget accordingly.
Not Working with a Real Estate Agent
Many first-time homebuyers make the mistake of going through the home-buying process alone. A real estate agent can help you understand the local market, find homes that match your criteria, negotiate on your behalf, and guide you through the closing process. They have the experience and knowledge to help you make an informed decision.
Buying a home can be overwhelming, especially if you’re a first-time homebuyer. It’s important to do your research and avoid costly mistakes. By taking the time to get a pre-approval, getting a home inspection, shop around for a mortgage, understanding closing costs, and working with a real estate agent, you can avoid unnecessary expenses and make a sound investment. Remember, buying a home is a big decision, don’t rush it. Take your time and make an informed decision.
Peter Cunha is a broker/salesperson at Real Broker LLC. He has been in the real estate industry for over 10 years, specializing in commercial and residential real estate. He enjoys helping people find their new home whether they are first time homebuyers or savvy investors.
He is one of the biggest and brightest realtors in Middlesex, Monmouth and Ocean County.
Currently living in Lincroft NJ, Peter enjoys spending time with his wife and daughter (Amber and Keira), three dogs (named Twizzler, Batman and Peanut), playing chess; listening to music; watching movies; traveling; enjoying nature walks on beaches or through local parks.