The drive to get a real house rather than just another apartment can make some a little more optimistic about the home buying process than they should be. Adding in a healthy dose of skepticism and a little research can help you avoid many of the mistakes other home-buyers (myself included) have made.
Below are seven common mistakes a first-time home buyer might make and tried-and-true suggestions on how to avoid them. Sometimes, however, the best you can do to insure yourself and your choices is to pick up one of the many home protection plans out there.
Problems Can Be Seasonal
Always get a home inspection for any home you are interested in. Not every homeowner is willing to disclose everything, even if they are legally obligated to. A home inspection will usually only take a few hours.A seasoned inspector may be able to suggest a few seasonal issues you may not have considered, like thin insulation or trees placed too close to a home or power line.
In addition to a home inspection, ask if you can see any pictures of the home during different seasons. Does melting snow have a good drainage path, or does it tend to pool on the walkway or toward the front door? Winter and early spring drainage, while not structural issues, can cause more problems over time and are frequently overlooked.
Not All Loans and Mortgages Are Created Equal
First-time home-buyers are given many advantages when it comes to being approved for a loan. While many credit unions and financial institutions will be happy to direct you toward the programs that are right for you, some banks are a little less friendly.
"Before you apply, go over the list of government-endorsed programs for new home buyers, including FHA loan limits. The most recognized government-endorsed programs or government-backed loans are VA, USDA, and FHA loans. Understanding the specific features and requirements of each program, such as fha loan limits, can help you make an informed decision and determine which option is best suited for your needs and financial situation." These programs can help you get a loan with lower interest, down-payment assistance, or a low-credit-score mortgage. Visit the USDA eligibility map to find out if you can qualify for a USDA home loan.
Buying Too Much House and Too Little Land
If you are purchasing any home, new or pre-owned, ask to see copies of recent utility bills and other financial costs of living there. The larger the house, the more it will cost to heat and cool the building. Further, the type of insulation, windows, and even flooring can make a big difference in these costs, too. You can even combine types of insulations with other objects in the house that have a resistance to heat flow through a material’s thickness. For example, placing bubble wrap insulation on your windows can work fine for not letting the heat escape. When cold days arrive, this will lower your utility bills for sure.
The cost of a mortgage payment is never the actual cost of a given home. For many, choosing a smaller house on a more considerable lot will be a better investment in the long term. Adding an addition, upgrade, or outdoor space is often more cost-effective than the cost of maintaining a too-large home and taking on more interest payments.
Not Talking to The Neighbors
A lot of mistakes new home buyers make is financial. However, they can also be related to your quality of life after you move in. Bad neighbors are just as expensive as many physical issues. They can also wear on your sanity.
Talk to your neighbors, ask them about their community. See what they have to complain about or if they were friends the previous owners of the home you are interested in. Visit the neighborhood at different times of the day and at different times of the week.
Saving Up Too Little and Spending It All
Once you manage to get the key to your new home, you might want to check your door locks and see to it that it can’t be broken easily by burglars using simple tools. You have to have enough to pay for your first month of bills, moving expenses, new furniture, appliances, and a few small repairs. Ideally, you’ll have six months’ worth of savings, but it’s rare for any home-buyer to have that much. There are, however, a few things you could do to make your savings stretch farther.
Need a little more for your down-payment to save enough for an emergency? Apply for one of the thousands of FHA grants available. Many of these grants give preference to first-time home buyers. Some grants are only available in certain cities, and all of them are sorted by state.
Shop for a Mortgage, Then Shop for a House
Knowing how much you can spend, or if you can get a mortgage at all, will show you what your options are. That, and you won’t be looking at houses drastically out of your price range and having your perspective skewed in the process.
Never Assume a Fixer-Upper is the Best Choice
In many small cities, old brick houses are very inexpensive. They tempt many new home-buyers. However, they’re cheap for a reason- they have no central air or heat. These houses are old, structurally sound, and are much less expensive per square foot. Until you consider the cost of adding in this modern-day essential.
Many fixer-uppers may seem tempting, just make sure you consult with a professional on how much repairs and upgrades will cost before you commit. This can save you money and heartbreak in the future.