First-Time Homebuying Mistakes

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To be a homeowner is one of your lifelong dreams. When it happens, you know you’ve achieved something meaningful. But you also know that the road to becoming a homeowner is not easy. It’s going to be a bit tough, and there are challenges along the way. But you know you’re ready, and you want to take the first step to owning your first home.

One of the most significant financial moves you’ll make in your life is buying your very first home. It’s an exciting milestone, but also a complex process with lots of pitfalls that can trip up first-time buyers. Having helped many friends and family members navigate this journey, I’ve seen the costly mistakes people often make when purchasing their first property. Check out some of the ones you need to avoid:

Not Getting Pre-Approved for a Mortgage

Before you even start seriously house hunting, you need to get pre-approved for a mortgage. This involves providing details about your income, debts, and employment history, and having your credit checked by a lender. They’ll then tell you the maximum home price and mortgage amount you qualify for based on your financial situation. Having a pre-approval letter shows sellers you’re a serious, credible buyer and can act fast when making offers. It also prevents you from wasting time looking at homes outside your budget.

Skipping the Home Inspection

When you find a home you love, it’s tempting to want to rush the process and just have your offer accepted already! But never skip the professional home inspection. This may cost a few hundred dollars, but it could save you tens of thousands by uncovering any major issues like a faulty foundation, roof problems, mold issues, etc. An inspector’s trained eye will spot potential red flags that you’re sure to miss. If major repairs are needed, you can renegotiate the price or walk away.

Draining Your Savings

Ah, the sweet success of finally going to closing and getting those coveted new home keys! But don’t make the mistake of draining your entire life’s savings to make the purchase. Lenders want to see that you’ll have sufficient funds left over after closing to cover several months’ worth of mortgage payments and other housing costs like property taxes, maintenance, etc. Plan to have a cash reserve of ideally 6 months’ worth of housing expenses socked away after closing.

Miscalculating the True Costs

Speaking of costs, many first-time buyers underestimate all the expenses beyond just the mortgage payment. Budget for homeowners insurance, property taxes, HOA fees, higher utility bills compared to renting, routine maintenance costs, and any renovation plans you may have. Mortgage calculators don’t account for these fees, so do the math. These recurring costs can add thousands to your annual housing expenses.

Buying More Home Than You Can Afford 

This one is tempting – you find a home that’s gorgeous but at the upper end of what you qualified for from the bank. Don’t assume you’ll be able to swing those premium mortgage payments! It’s often wiser to shop slightly below your pre-approved amount to find greater affordability. Take a hard look at your monthly budget and factor in all the additional homeownership costs mentioned above. You don’t want to become house-poor and have no room for other financial goals like savings or retirement contributions.

Being Steered by Emotions

Finding your first home isn’t just a financial transaction – it’s deeply emotional and personal. You’re envisioning all the holidays, milestones, and memories you’ll make in your new abode. But don’t let those sentimental factors cloud your judgment. It’s crucial to remove rose-colored glasses and objectively assess properties, neighborhoods, prices, and long-term costs. Work closely with an experienced real estate agent who can guide you through tough decisions through an impartial lens. Don’t let the emotions of the process lead you into making a misguided purchase you may regret for years down the road.

Buying your first home is thrilling, but it can also be fraught with expensive pitfalls if not approached thoughtfully and strategically. Avoiding these common mistakes will pave the way for a smoother process and set you up for long-term homeownership success. Consider the St. Louis lenders that you’ll consult. 

Take a deep breath, and surround yourself with experienced professionals, like our team at St. Louis Mortgage Consultants.  We have the programs and resources to point you in the right direction. Lastly, think with your head and your heart, and enjoy this exciting milestone purchase!

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